Exelon (EXC) 10-K risk factor changes: FY2022 vs FY2021

See Note [removed: 26] [added: 14] — [removed: Separation] [added: Retirement Benefits] of the Combined Notes to Consolidated Financial Statements for additional information.

- the ability of the Utility Registrants to operate their respective transmission and distribution assets, their ability to access capital markets, and the impacts on their results of [removed: operations] [added: operations, financial condition or liquidity/cash flows] due to [removed: the global outbreak (pandemic) of the 2019 novel coronavirus (COVID-19),] [added: public health crises, epidemics or pandemics, such as COVID-19,] and

- performance by Exelon and [removed: Generation] [added: Constellation] under the transaction agreements, including indemnification responsibilities.

These factors could affect the Registrants’ consolidated financial statements through, among other things, increased operating and maintenance expenses, increased capital [added: expenditures, and potential asset impairment charges or accelerated depreciation over shortened remaining asset useful lives.]

See Note [removed: 15] [added: 1] — [removed: Retirement Benefits] [added: Significant Accounting Policies and Note 13 — Income Taxes] of the Combined Notes to Consolidated Financial Statements for additional information.

The inability to access capital markets or credit facilities, and longer-term disruptions in the capital and credit markets [removed: as a result] [added: because] of uncertainty, changing or increased regulation, reduced alternatives, or failures of significant financial institutions could result in the deferral of discretionary capital expenditures, or require a reduction in dividend payments or other discretionary uses of cash.

As of December 31, [removed: 2021,] [added: 2022,] approximately [removed: 20%, 17%,] [added: 23%, 10%,] and 16% of the Registrants’ available credit facilities [removed: (not including Generation's credit facilities)] were with European, Canadian, and Asian banks, respectively.

See Note [removed: 17] [added: 16] — Debt and Credit Agreements of the Combined Notes to Consolidated Financial Statements for additional information on the credit facilities.

The Utility Registrants conduct their respective businesses and operate under governance models and other arrangements and procedures intended to assure that the Utility Registrants are treated as separate, [added: independent companies, distinct from Exelon and other Exelon subsidiaries in order to isolate the Utility Registrants from Exelon and other Exelon subsidiaries in the event of financial difficulty at Exelon or another Exelon subsidiary.]

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS — Liquidity and Capital Resources — Credit Matters [removed: — Market Conditions] and [added: Cash Requirements —] Security Ratings for additional information regarding the potential impacts of credit downgrades on the Registrants’ cash flows.

COVID-19 [removed: has] disrupted economic activity in the Registrants’ respective markets and negatively affected the Registrants’ results of [removed: operations.][added: operations in 2020.]

In addition, any future widespread pandemic or other local or global health issue could adversely affect [added: our vendors, competitors or customers and] customer demand [removed: and] [added: as well as] the Registrants’ ability to operate their transmission and distribution assets.

ComEd and PHI perform an assessment for possible impairment of their goodwill at least annually or more frequently if an event occurs or circumstances change that would more likely than not reduce the fair value of the [removed: reporting units below their carrying amount.]

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS — Critical Accounting Policies and Estimates, Note [removed: 8] [added: 7] — Property, Plant, and Equipment, Note [removed: 12] [added: 11] — Asset [removed: Impairments] [added: Impairments,] and Note [removed: 13] [added: 12] — Intangible Assets of the Combined Notes to the Consolidated Financial Statements for additional information on long-lived asset impairments and goodwill impairments.

In connection with the restructurings under which ComEd, PECO, and BGE transferred their generating assets to [removed: Generation, Generation] [added: Constellation, Constellation] assumed certain of ComEd’s, PECO’s, and BGE's rights and obligations with respect to their former generation businesses.

Further, ComEd, PECO, and BGE have entered into agreements with third parties under which the third-party agreed to indemnify ComEd, PECO, or BGE for certain obligations related to their respective former generation businesses that have been assumed by [removed: Generation] [added: Constellation] as part of the restructuring.

If the third-party, [removed: Generation,] [added: Constellation,] or the transferee of Pepco's, DPL's, or ACE’s generation facilities experienced events that reduced its creditworthiness or the indemnity arrangement became unenforceable, the applicable Utility Registrant could be liable for any existing or future claims.

The Registrants have issued indemnities to third parties regarding environmental or other matters in connection with purchases and sales of assets, including several of the Utility Registrants in connection with [removed: Generation's] [added: Constellation's] absorption of their former generating assets.

The Registrants have issued guarantees of the performance of third parties, which obligate the Registrants to perform [removed: in the event that] [added: if] the third parties do not perform.

The Registrants' businesses are highly regulated and [added: electric and gas revenue and earnings] could be negatively affected by legislative and/or regulatory actions (All Registrants).

The Utility Registrants' consolidated financial statements are heavily dependent on the ability of the Utility Registrants to recover their costs for the retail [removed: purchase] [added: purchase, transmission,] and distribution of power and natural gas to their customers.

Changes in the Utility Registrants' respective terms and conditions of service, including their respective rates, [added: along with adoption of new rate structures and constructs, or establishment of new rate cases,] are subject to regulatory approval proceedings and/or negotiated settlements that are at times contentious, lengthy, and subject to appeal, which lead to uncertainty as to the ultimate [removed: result] [added: result,] and which could introduce time delays in effectuating rate changes (All Registrants).

The Utility Registrants are required to engage in regulatory approval proceedings as a part of the process of establishing the terms and rates for their respective [removed: services.][added: services, adoption of new rate structures and constructs or establishment of new rate cases.]

These laws and regulations affect the [removed: manner in which] [added: way] the Registrants conduct their operations and make capital expenditures including how they handle air and water emissions, hazardous and solid waste, and activities affecting surface waters, groundwater, and aquatic and other species.

Also, the Registrants are currently involved in [removed: a number of] [added: several] proceedings relating to sites where hazardous substances have been deposited and could be subject to additional proceedings in the future.

These energy conservation programs, regulated energy consumption reduction targets, and new energy consumption technologies could cause declines in customer energy consumption and lead to a decline in the Registrants' [removed: revenues.][added: earnings, if timely recovery is not allowed.]

The Registrants are required to make judgments [removed: in order] to estimate their obligations to taxing [removed: authorities.][added: authorities, which includes general tax positions taken and associated reserves established.]

[removed: These tax] [added: Tax] obligations [removed: include] [added: include, but are not limited to:] income, real estate, sales and use, and employment-related taxes and ongoing appeal issues related to these tax matters.

See Note [removed: 1] [added: 18] — [removed: Significant Accounting Policies] [added: Commitments] and [removed: Note 14 — Income Taxes] [added: Contingencies] of the Combined Notes to Consolidated Financial [removed: Statements for additional information.][added: Statements.]

The material ones are summarized in Note [removed: 19] [added: 18] — Commitments and Contingencies of the Combined Notes to Consolidated Financial Statements.

Adverse outcomes in these proceedings could require significant expenditures, result in lost revenue, or [removed: restrict existing] [added: restrict, or disrupt] business activities.

Any of the foregoing, as well as the appearance of non-compliance with anti-corruption and anti-bribery laws, could have an adverse impact on Exelon’s and ComEd’s reputations or relationships with regulatory and legislative authorities, customers, and other stakeholders, as well as their consolidated financial [removed: statements.]

See Note [removed: 19] [added: 18] — Commitments and Contingencies of the Combined Notes to Consolidated Financial Statements.

The DPA provides that the USAO will defer any prosecution of such charge and any other criminal or civil case against ComEd in connection with the matters identified therein for a three-year period subject to certain obligations of ComEd, including, but not limited to, the following: (i) payment to the [removed: United States] [added: U.S.] Treasury of $200 million; (ii) continued full cooperation with the government’s investigation; and (iii) ComEd’s adoption and maintenance of remedial measures involving compliance and reporting undertakings as specified in the DPA.

The Registrants periodically perform analyses to better understand [removed: how] [added: long-term projections of] climate change [added: and how those changes in the physical environments where they operate] could affect their facilities and operations.

The Registrants primarily operate in the Midwest and [removed: East Coast] [added: Mid-Atlantic] of the United States, areas that historically have been prone to various types of severe weather events, and as such the Registrants have well-developed response and recovery programs based on these historical events.

However, the Registrants’ physical facilities could be [removed: placed] at greater risk of damage [removed: should] [added: as] changes in the global climate [removed: impact] [added: affect] temperature and weather patterns, [removed: and] [added: or be placed at greater risk of damage should climate changes] result in more intense, frequent and extreme weather events, [removed: unprecedented] [added: elevated] levels of precipitation, sea level rise, increased surface water temperatures, and/or other effects.

Over time, the Registrants [removed: may need to make] [added: are making] additional investments to protect their facilities from physical climate-related risks.

Over time, the Registrants [removed: may need to make] [added: are making] additional investments to adapt to changes in operational requirements [removed: as a result of] [added: to manage demand changes and customer expectations caused by] climate change.

Climate [removed: mitigation and transition] [added: Change] risks include changes to the energy systems [removed: as a result of] [added: due to] new technologies, changing customer expectations and/or voluntary GHG goals, as well as local, [removed: state] [added: state,] or federal regulatory requirements intended to reduce GHG emissions.

Increasing pressure from both the private and public sectors to take actions to mitigate climate change could also push the speed and nature of this transition.

Additionally, higher interest rates may put pressure on the Registrants’ overall liquidity profile, financial health and impact financial results.

Public health crises, epidemics, or pandemics, such as COVID-19 could negatively impact the Registrants' results (All Registrants).

However, the financial impacts were not material for the years ended December 31, 2021 and December 31, 2022, other than the 2022 impairment disclosure within Note 11 — Asset Impairments.

reporting units below their carrying amount.

All tax estimates could be subject to challenge by the tax authorities.

Additionally, earnings may be impacted due to changes in federal or local/state tax laws, and the inherent difficulty of estimating potential tax effects of ongoing business decisions.

statements.

BUSINESS — Environmental Matters and Regulation — Climate Change and ITEM 1.A.

Additionally, the U.S. government has warned that the Ukraine conflict may increase the risks of attacks targeting critical infrastructure in the United States.

As a result, employees,

Additionally, if critical parts are not available, it may impact the timing of execution of capital projects.

The Registrants’ performance could be negatively affected by poor performance of third-party contractors that perform periodic or ongoing work (All Registrants).

All Registrants rely on third-party contractors to perform operations, maintenance, and construction work.

Performance standards typically are included in all contractual obligations, but poor performance may impact the capital execution plan or operations, or have adverse financial or reputational consequences.

Further, the indemnities from Constellation for Exelon's benefit may not be

On February 21, 2021, Exelon’s Board of Directors approved a plan to separate the Utility Registrants and Generation, creating two publicly traded companies.

The separation was completed on February 1, 2022.

As such, the risk factors discussed below do not include those associated with Generation.

expenditures, and potential asset impairment charges or accelerated depreciation over shortened remaining asset useful lives.

independent companies, distinct from Exelon and other Exelon subsidiaries in order to isolate the Utility Registrants from Exelon and other Exelon subsidiaries in the event of financial difficulty at Exelon or another Exelon subsidiary.

The Registrants' results were negatively affected by the impacts of COVID-19 (All Registrants).

The estimated impact of COVID-19 to the Utility Registrants’ Net income was approximately $75 million for the year ended December 31, 2020 and was not material for the year ended December 31, 2021.

PECO, BGE, and DPL, as operators of natural gas distribution systems, are also subject to mandatory reliability standards of the U.S. Department of Transportation.

These judgments include reserves established for potential adverse outcomes regarding tax positions that have been taken that could be subject to challenge by the tax authorities.

Climate adaptation risk refers to risks to the Registrants' facilities or operations that may result from changes in the physical climate, such as changes to temperature, weather patterns and sea level.

legal claims, loss of revenues, increased costs, or operations shutdown.

See "The Registrants' results were negatively affected by the impacts of COVID-19" above for additional information.

[removed: As of December 31, 2021,] Exelon [removed: was] [added: is] a utility services holding company engaged in the [removed: generation, delivery, and marketing of] energy [removed: through Generation and the energy] distribution and transmission businesses through ComEd, PECO, BGE, Pepco, DPL, and ACE.

Exelon has [removed: eleven] [added: six] reportable segments consisting of [removed: Generation’s five reportable segments (Mid-Atlantic, Midwest, New York, ERCOT, and Other Power Regions),] ComEd, PECO, BGE, Pepco, DPL, and ACE.

Exelon’s consolidated financial information includes the results of its seven separate operating subsidiary registrants, ComEd, PECO, BGE, PHI, Pepco, DPL, and [removed: ACE and its subsidiary Generation.][added: ACE, which, along with Exelon, are collectively referred to as the Registrants.]

The following combined Management’s Discussion and Analysis of Financial Condition and Results of Operations [removed: summarizes results for the year ended December 31, 2021 compared to the year ended December 31, 2020, and] is separately filed by Exelon, ComEd, PECO, BGE, PHI, Pepco, DPL, and ACE.

For discussion of the [added: Utility Registrants'] year ended December 31, [removed: 2020] [added: 2021] compared to the year ended December 31, [removed: 2019,] [added: 2020,] refer to ITEM 7.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS in the [removed: 2020] [added: 2021 Recast] Form 10-K, which was filed with the SEC on [removed: February 24, 2021.][added: June 30, 2022.]

The Registrants assessed long-lived assets, goodwill, and investments for [removed: recoverability and there were no material impairment charges recorded in 2020 or 2021 as a result of COVID-19.][added: recoverability.]

See Note [removed: 12] [added: 11] — Asset Impairments of the Combined Notes to Consolidated Financial Statements for additional [removed: information related to other impairment assessments.][added: information.]

GAAP Results of Operations. The following table sets forth Exelon's GAAP consolidated Net [removed: Income] [added: income] attributable to common shareholders [removed: by Registrant or subsidiary] [added: from continuing operations and the Utility Registrants' Net income] for the year ended December 31, [removed: 2021] [added: 2022] compared to the same period in [removed: 2020.][added: 2021.]

For additional information regarding the financial results for the years ended December 31, [removed: 2021] [added: 2022] and [removed: 2020] [added: 2021] see the discussions of Results of Operations by [removed: Registrant or subsidiary.][added: Registrant.]

| | | | [removed: 2021] [added: 2022] | | | | | | [removed: 2020] [added: 2021] | | | | | | [removed: (Unfavorable) Favorable] [added: Favorable (Unfavorable)] Variance | | |

| PECO | | | [removed: 504] [added: 576] | | | | | | [removed: 447] [added: 504] | | | | | | [removed: 57] [added: 72] | | |

| BGE | | | [removed: 408] [added: 380] | | | | | | [removed: 349] [added: 408] | | | | | | [removed: 59] [added: (28)] | | |

| PHI | | | [removed: 561] [added: 608] | | | | | | [removed: 495] [added: 561] | | | | | | [removed: 66] [added: 47] | | |

| Pepco | | | [removed: 296] [added: 305] | | | | | | [removed: 266] [added: 296] | | | | | | [removed: 30] [added: 9] | | |

| DPL | | | [removed: 128] [added: 169] | | | | | | [removed: 125] [added: 128] | | | | | | [removed: 3] [added: 41] | | |

| ACE | | | [removed: 146] [added: 148] | | | | | | [removed: 112] [added: 146] | | | | | | [removed: 34] [added: 2] | | |

Year Ended December 31, [removed: 2021] [added: 2022] Compared to Year Ended December 31, [removed: 2020.] [added: 2021.] Net income attributable to common [removed: shareholders decreased] [added: shareholders from continuing operations increased] by [removed: $257] [added: $438] million and diluted earnings per average common share [removed: decreased] [added: from continuing operations increased] to [removed: $1.74] [added: $2.08] in [removed: 2021] [added: 2022] from [removed: $2.01] [added: $1.65] in [removed: 2020] [added: 2021] primarily due to:

The [removed: decreases] [added: increases] were partially offset [removed: by;][added: by:]

- Higher electric distribution earnings [added: and energy efficiency earnings] from higher rate base and higher allowed ROE due to an increase in treasury rates at ComEd;

- The favorable impacts of [removed: the multi-year plan at BGE and Pepco and regulatory] rate increases at [removed: DPL] [added: PECO, BGE,] and [removed: ACE;][added: PHI;]

The following table provides a reconciliation between Net income attributable to common shareholders [added: from continuing operations] as determined in accordance with GAAP and Adjusted (non-GAAP) operating earnings for the year ended December 31, [removed: 2021 as] [added: 2022] compared to [removed: 2020:][added: 2021:]

| Mark-to-Market Impact of Economic Hedging Activities (net of taxes of [removed: $145] [added: $1] and [removed: $73,] [added: $3,] respectively) | | | [removed: (421)] [added: 4] | | | | | | [removed: (0.43)] [added: —] | | | | | | [removed: (213)] [added: 4] | | | | | | [removed: (0.22)] [added: —] | | |

| Cost Management Program (net of taxes of [removed: $2 and $14, respectively)(d)] [added: $1)(b)] | | | [removed: 9] [added: —] | | | | | | [removed: 0.01] [added: —] | | | | | | [removed: 45] [added: 6] | | | | | | [removed: 0.05] [added: 0.01] | | |

| Asset Retirement Obligation (net of taxes of [removed: $12] [added: $2] and [removed: $16, respectively)(e)] [added: $1, respectively)] | | | [removed: (35)] [added: (4)] | | | | | | [removed: (0.04)] [added: —] | | | | | | [removed: 48] [added: 2] | | | | | | [removed: 0.05] [added: —] | | |

| COVID-19 Direct Costs (net of taxes of [removed: $13 and $19, respectively)(f)] [added: $6)(c)] | | | [removed: 36] [added: —] | | | | | | [removed: 0.04] [added: —] | | | | | | [removed: 50] [added: 14] | | | | | | [removed: 0.05] [added: 0.01] | | |

| Acquisition Related Costs (net of taxes of [removed: $5 and $1, respectively)(h)] [added: $5)(d)] | | | [removed: 15] [added: —] | | | | | | [removed: 0.02] [added: —] | | | | | | [removed: 4] [added: 15] | | | | | | [removed: —] [added: 0.02] | | |

| ERP System Implementation Costs (net of taxes of [removed: $4] [added: $0] and [removed: $1, respectively)(i)] [added: $4, respectively)(e)] | | | [removed: 13] [added: 1] | | | | | | [removed: 0.01] [added: —] | | | | | | [removed: 3] [added: 13] | | | | | | [removed: —] [added: 0.01] | | |

| Income Tax-Related Adjustments (entire amount represents tax [removed: expense)(l)] [added: expense)(g)] | | | [removed: 47] [added: 122] | | | | | | [removed: 0.05] [added: 0.12] | | | | | | [removed: 71] [added: 62] | | | | | | [removed: 0.07] [added: 0.06] | | |

[removed: For all items except the unrealized gains and losses related to NDT funds, the] [added: The] marginal statutory income tax rates for [removed: 2021] [added: 2022] and [removed: 2020] [added: 2021] ranged from [removed: 25.0%] [added: 24.0%] to 29.0%.

[removed: The effective] [added: Effective income] tax [removed: rates for the unrealized gains and losses related to NDT funds] [added: rates] were [removed: 50.4%] [added: 22.4%] and [removed: 52.1%] [added: 18.8%] for the years ended December 31, [removed: 2021] [added: 2022] and [removed: 2020,] [added: 2021,] respectively.

[removed: (d)Primarily] [added: (b)Primarily] represents reorganization [removed: and severance] costs related to cost management programs.

[removed: (f)Represents] [added: (c)Represents] direct costs related to COVID-19 consisting primarily of costs to acquire personal protective equipment, costs for cleaning supplies and services, and costs to hire healthcare professionals to monitor the health of [removed: employees.][added: employees, which are recorded in Operating and maintenance expense.]

[removed: (j)Represents costs related to the] [added: The] separation [added: costs are] primarily comprised of system-related costs, third-party costs paid to advisors, consultants, lawyers, and other experts assisting in the [removed: planned] separation, and employee-related severance costs.

[removed: (l)In] [added: (g)In] 2021, [added: for PHI,] primarily reflects the recognition of a valuation allowance against a deferred tax asset associated with Delaware net operating loss carryforwards due to a change in Delaware tax law.

In [removed: 2021 and 2020, also] [added: 2021, for Corporate,] reflects the adjustment to deferred income taxes due to changes in forecasted apportionment.

Significant [removed: 2021] [added: 2022] Transactions and Developments

On February 21, 2021, Exelon’s Board of Directors approved a plan to separate the Utility Registrants and Generation, creating two publicly traded companies [removed: with the resources necessary to best serve customers and sustain long-term investment and operating excellence ("the separation").][added: (“the separation”).]

See Note [removed: 26] [added: 19] — [removed: Separation] [added: Shareholders' Equity] of the Combined Notes to Consolidated Financial Statements for additional information.

In connection with the separation, Exelon incurred [removed: transaction] [added: separation] costs [added: impacting continuing operations] of [removed: $122] [added: $34] million [added: and $79 million] on a pre-tax basis for the year ended December 31, [added: 2022 and] 2021, [added: respectively,] which are recorded in Operating and maintenance expense.

There were no material impacts to Exelon from unfavorable economic conditions due to COVID-19 for the years ended December 31, 2022 and 2021, other than the 2022 impairment discussed below.

Exelon and BGE recorded a pre-tax impairment charge of $48 million in 2022 as a result of COVID-19 impacts on office use.

See Note 12 — Asset Impairments for additional information related to this impairment assessment.

None of the other Registrants recorded material impairment charges in 2022 as a result of COVID-19.

Additionally, there were no material impairment charges recorded in 2021 as a result of COVID-19.

| Exelon | | | 2,054 | | | | | | 1,616 | | | | | | $ | 438 | |

| ComEd | | | 917 | | | | | | 742 | | | | | | 175 | | |

| Other(a) | | | (427) | | | | | | (599) | | | | | | 172 | | |

The separation of Constellation Energy Corporation, including Generation and its subsidiaries, meets the criteria for discontinued operations and as such, Generation's results of operations are presented as discontinued operations and have been excluded from Exelon's continuing operations for all periods presented.

See Note 1 — Significant Accounting Policies and Note 2 — Discontinued Operations for additional information.

Accounting rules require that certain BSC costs previously allocated to Generation be presented as part of Exelon’s continuing operations as these costs do not qualify as expenses of the discontinued operations.

Such costs are included in Other in the table above and were $28 million and $429 million on a pre-tax basis, for the years ended December 31, 2022 and 2021, respectively.

- Favorable impacts of decreased storm costs at PECO and BGE; and

- Lower BSC costs presented in Exelon’s continuing operations, which were previously allocated to Generation but do not qualify as expenses of the discontinued operation per the accounting rules.

- An income tax expense recorded in connection with the separation primarily due to the long-term marginal state income tax rate change, the recognition of valuation allowances against the net deferred tax assets positions for certain standalone state filing jurisdictions, and nondeductible transaction costs partially offset by a one-time impact associated with a state tax benefit;

- An adjustment at PECO to exclude one-time non-cash impacts associated with the remeasurement of deferred income taxes as a result of the reduction in Pennsylvania corporate income tax rate;

- Higher depreciation expense at PECO, BGE, and PHI;

- Higher credit loss expense at PECO, BGE, and PHI;

- Higher storm costs at PHI; and

- Higher interest expense at PECO, BGE, PHI, and Exelon Corporate.

| | | | 2022 | | | | | | | | | | | | 2021 | | | | | | | | |

| Net Income Attributable to Common Shareholders from Continuing Operations | | | $ | 2,054 | | | | | $ | 2.08 | | | | | $ | 1,616 | | | | | $ | 1.65 | |

| Asset Impairments (net of taxes of $10)(a) | | | 38 | | | | | | 0.04 | | | | | | — | | | | | | — | | |

| Separation Costs (net of taxes of $10 and $21, respectively)(f) | | | 24 | | | | | | 0.02 | | | | | | 58 | | | | | | 0.06 | | |

| Adjusted (non-GAAP) Operating Earnings | | | $ | 2,239 | | | | | $ | 2.27 | | | | | $ | 1,791 | | | | | $ | 1.83 | |

(a)Reflects costs related to the impairment of an office building at BGE, which are recorded in Operating and maintenance expense.

(d)Reflects certain BSC costs related to the acquisition of EDF's interest in CENG, which was completed in the third quarter of 2021, that were historically allocated to Generation but are presented as part of continuing operations in Exelon's results as these costs do not qualify as expenses of the discontinued operations per the accounting rules.

(e)Reflects costs related to a multi-year ERP system implementation, which are recorded in Operating and maintenance expense.

In 2022, for PECO, primarily reflects an adjustment to exclude one-time non-cash impacts associated with the remeasurement of deferred income taxes as a result of the reduction in Pennsylvania corporate income tax rate.

In 2022, for Corporate, in connection with the separation, Exelon recorded an income tax expense primarily due to the long-term marginal state income tax rate change, the recognition of valuation allowances against the deferred tax assets positions for certain standalone state filing jurisdictions, and nondeductible transaction costs partially offset by a one-time impact associated with a state tax benefit.

Constellation was newly formed and incorporated in Pennsylvania on June 15, 2021 for the purpose of separation and holds Generation.

The separation represented a strategic shift that would have a major effect on Exelon’s operations and financial results.

Accordingly, the separation meets the criteria for discontinued operations.

Equity Securities Offering

On August 4, 2022, Exelon entered into an agreement with certain underwriters in connection with an underwritten public offering of 12.995 million shares of its common stock, no par value.

The net proceeds were $563 million before expenses paid by Exelon.

| | | | April 15, 2022 | | | | | | Electric | | | | | | 199 | | | | | | 199 | | | | | | 7.85 | | % | | | | November 17, 2022 | | | | | | January 1, 2023 | | | | | |

| | | | March 31, 2022 | | | | | | Natural Gas | | | | | | 82 | | | | | | 55 | | | | | | | | | October 27, 2022 | | | | | | January 1, 2023 | | | | | | | | |

| ComEd - Illinois | | | | | | January 17, 2023 | | | | | | Electric | | | | | | $ | 1,472 | | | | | 10.50% to 10.65% | | | | | | Fourth quarter of 2023 | | |

| DPL - Delaware | | | | | | December 15, 2022 | | | | | | Electric | | | | | | 60 | | | | | | 10.50 | | % | | | | Second quarter of 2024 | | |

Unfavorable economic conditions due to COVID-19 resulted in an estimated reduction to Exelon’s Net income of approximately $245 million for the year ended December 31, 2020.

The impact was not material for the year ended December 31, 2021.

To offset the unfavorable impacts from COVID-19, Exelon identified approximately $250 million in cost savings in 2020.

The cost savings achieved in 2020 were higher than originally anticipated.

| | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Exelon | | | $ | 1,706 | | | | | $ | 1,963 | | | | | $ | (257) | |

| ComEd | | | 742 | | | | | | 438 | | | | | | 304 | | |

| Generation | | | (205) | | | | | | 589 | | | | | | (794) | | |

| Other(a) | | | (304) | | | | | | (355) | | | | | | 51 | | |

__________

- Impacts of the February 2021 extreme cold weather event;

- Accelerated depreciation and amortization associated with Generation's previous decision in the third quarter of 2020 to early retire Byron and Dresden nuclear facilities in 2021, a decision which was reversed on September 15, 2021, and Generation's decision in the third quarter of 2020 to early retire Mystic Units 8 and 9 in 2024;

- Decommissioning-related activities that were not offset for the Byron units beginning in the second quarter of 2021 through September 15, 2021.

With Generation's September 15, 2021 reversal of the previous decision to retire Byron, Generation resumed contractual offset for Byron as of that date;

- Impairments at Generation of the New England asset group, the Albany Green Energy biomass facility, and a wind project, partially offset by the absence of an impairment of the New England asset group in the third quarter of 2020;

- Higher net unrealized and realized losses on equity investments; and

- The absence of prior year one-time tax settlements.

- Favorable weather conditions at PECO and DPL's Delaware service territory;

- Favorable volume at PECO and ACE;

- Lower storm costs at PECO and DPL due to the absence of the June 2020 and August 2020 storms, respectively;

- Lower operating and maintenance expense at ComEd due to the payments that ComEd made in 2020 under the Deferred Prosecution Agreement;

- Higher mark-to-market gains;

- Higher net unrealized and realized gains on NDT funds;

- Absence of one time charges recorded in the third quarter of 2020 associated with Generation's decision to early retire the Byron and Dresden nuclear facilities and Mystic Units 8 and 9, and the reversal of one-time charges resulting from the reversal of the previous decision to early retire Byron and Dresden on September 15, 2021;

- Favorable sales and hedges of excess emission credits;

- Favorable commodity prices on fuel hedges;

- Lower nuclear fuel costs due to accelerated amortization of nuclear fuel and lower prices; and

- Higher New York ZEC revenues due to higher generation and an increase in ZEC prices.

| | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | 2021 | | | | | | | | | | | | 2020 | | | | | | | | |

| Net Income Attributable to Common Shareholders | | | $ | 1,706 | | | | | $ | 1.74 | | | | | $ | 1,963 | | | | | $ | 2.01 | |

| Unrealized Gains Related to NDT Fund Investments (net of taxes of $141 and $278, respectively)(a) | | | (139) | | | | | | (0.14) | | | | | | (256) | | | | | | (0.26) | | |

| Asset Impairments (net of taxes of $136 and $135, respectively)(b) | | | 405 | | | | | | 0.41 | | | | | | 396 | | | | | | 0.41 | | |

| Plant Retirements and Divestitures (net of taxes of $290 and $244, respectively)(c) | | | 865 | | | | | | 0.88 | | | | | | 718 | | | | | | 0.74 | | |

| Change in Environmental Liabilities (net of taxes of $3 and $6, respectively) | | | 9 | | | | | | 0.01 | | | | | | 18 | | | | | | 0.02 | | |

| Deferred Prosecution Agreement Payments (net of taxes of $0)(g) | | | — | | | | | | — | | | | | | 200 | | | | | | 0.20 | | |

| Separation Costs (net of taxes of $31)(j) | | | 90 | | | | | | 0.09 | | | | | | — | | | | | | — | | |

| Costs Related to Suspension of Contractual Offset (net of taxes of $45)(k) | | | 148 | | | | | | 0.15 | | | | | | — | | | | | | — | | |

[removed: After separation, reporting on risk] [added: Risk] management issues [removed: will be] [added: are reported] to Exelon’s [removed: Executive Committee, the Risk Management Committees] [added: Board] of [removed: each Utility Registrant, and the] [added: Directors, Exelon's] Audit and Risk [removed: Committee of Exelon’s] [added: Committee, and/or the applicable Utility] Board [removed: of Directors.][added: Registrant.]

To the extent the total amount of energy Exelon [removed: generates and] purchases differs from the amount of energy it has contracted to sell, Exelon is exposed to market fluctuations in commodity prices.

Exelon seeks to mitigate its commodity price risk through the sale and purchase of [removed: electricity, fossil fuel,] [added: electricity] and [removed: other commodities.][added: natural gas.]

See Note [removed: 16] [added: 15] — Derivative Financial Instruments of the Combined Notes to Consolidated Financial Statements for additional information.

[removed: ComEd has block energy contracts to procure electric supply that are executed through a competitive] procurement process, which are considered derivatives and qualify for NPNS, and as a result are accounted for on an accrual basis of accounting.

PECO, BGE, and DPL also have executed derivative natural gas contracts, which [removed: either] qualify for [removed: NPNS or have no mark-to-market balances because the derivatives are index priced,] [added: NPNS,] to hedge their long-term price risk in the natural gas market.

For additional information on these contracts, see Note 3 — Regulatory Matters and Note [removed: 16] [added: 15] — Derivative Financial Instruments of the Combined Notes to Consolidated Financial Statements.

See Note [removed: 16] [added: 17] — [removed: Derivative] [added: Fair Value of] Financial [removed: Instruments] [added: Assets and Liabilities] of the Combined Notes to Consolidated Financial Statements for additional information [removed: on the balance sheet classification of the mark-to-market energy contract net assets (liabilities) recorded as of December 31, 2021] [added: regarding fair value measurements] and [removed: 2020.][added: the fair value hierarchy.]

The following [removed: tables present] [added: table presents] maturity and source of fair value for [removed: Exelon] [added: Exelon's] and [removed: ComEd] [added: ComEd's] mark-to-market commodity contract [removed: net assets (liabilities).][added: liabilities.]

The [removed: tables provide] [added: table provides] two fundamental pieces of information.

First, the [removed: tables provide] [added: table provides] the source of fair value used in determining the carrying amount of Exelon's and ComEd's total mark-to-market [removed: net assets (liabilities), net of allocated collateral.][added: liabilities.]

Second, the [removed: tables show] [added: table shows] the maturity, by year, of Exelon's and ComEd's commodity contract [removed: net assets (liabilities), net of allocated collateral,] [added: liabilities] giving an indication of when these mark-to-market amounts will settle and [removed: either generate or] require cash.

See Note [removed: 18] [added: 16] — [removed: Fair Value of Financial Assets] [added: Debt] and [removed: Liabilities] [added: Credit Agreements] of the Combined Notes to Consolidated Financial Statements for additional [removed: information regarding fair value measurements and the fair value hierarchy.][added: information.]

| [added: Commodity derivative contracts(a):] | | | [removed: 2022] [added: 2023] | | | | | | [removed: 2023] [added: 2024] | | | | | | [removed: 2024] [added: 2025] | | | | | | [removed: 2025] [added: 2026] | | | | | | [removed: 2026] [added: 2027] | | | | | | [removed: 2027] [added: 2028] and Beyond | | | | | | | | |

| Prices based on model or other valuation methods (Level [removed: 3)(d)] [added: 3)] | | | [removed: 19] [added: $] | [added: (5)] | | | | | [removed: (93)] [added: $] | [added: (8)] | | | | | [removed: 2] [added: $] | [added: (11)] | | | | | [removed: (15)] [added: $] | [added: (12)] | | | | | [removed: (45)] [added: $] | [added: (13)] | | | | | [removed: (181)] [added: $] | [added: (35)] | | | | | [removed: (313)] [added: $] | [added: (84)] | |

See Note [removed: 16—Derivative] [added: 15 — Derivative] Financial Instruments of the Combined Notes to Consolidated Financial Statements for a detailed discussion of [added: counterparty] credit [removed: risk.][added: risk related to derivative instruments.]

See Note [removed: 1] [added: 15] — [removed: Significant Accounting Policies] [added: Derivative Financial Instruments] of the Combined Notes to Consolidated Financial Statements for [removed: the allowance for credit losses policy.][added: additional information.]

The credit policies of [removed: the RTOs and ISOs] [added: PJM] may, under certain circumstances, require that losses arising from the default of one member on spot energy market transactions be shared by the remaining participants.

[removed: Exelon and Generation] [added: The Registrants] use a combination of fixed-rate and variable-rate debt to manage interest rate exposure.

The Registrants hold commodity and financial instruments that are exposed to the following market risks:

- Commodity price risk, which is discussed further below.

- Counterparty credit risk associated with non-performance by counterparties on executed derivative instruments and participation in all, or some of the established, wholesale spot energy markets that are administered by PJM.

- Equity price and interest rate risk associated with Exelon’s pension and OPEB plan trusts.

See Note 14 — Retirement Benefits of the 2021 Recast Form 10-K for additional information.

- Interest rate risk associated with changes in interest rates for the Registrants’ outstanding long-term debt.

This risk is significantly reduced as substantially all of the Registrants’ outstanding debt has fixed interest rates.

There is inherent interest rate risk related to refinancing maturing debt by issuing new long-term debt.

In addition, Exelon Corporate may utilize interest rate derivatives to lock in rate levels in anticipation of future financings, which are typically designated as cash flow hedges, or to lock in rate levels on borrowings, which are typically designated as economic hedges.

- Electric operating revenues risk associated with ComEd's distribution formula rate.

ComEd's ROE for its electric distribution service through 2023 is directly correlated to yields on U.S. Treasury bonds.

Exelon Corporate may utilize interest rate derivatives to mitigate volatility and manage risk to Exelon, which are typically accounted for as economic hedges.

The Registrants operate primarily under cost-based rate regulation limiting exposure to the effects of market risk.

Hedging programs are utilized to reduce exposure to energy and natural gas price volatility and have no direct earnings impacts as the costs are fully recovered through regulatory-approved recovery mechanisms.

The Registrants do not execute derivatives for speculative or proprietary trading purposes.

ComEd has block energy contracts to procure electric supply that are executed through a competitive

_________

The Registrants are exposed to market risks associated with adverse changes in commodity prices, counterparty credit, interest rates, and equity prices.

Historically, reporting on risk management issues has been to Exelon’s Risk Management Committee, the Risk Management Committees of each Utility Registrant, and the Risk Committee of Exelon’s Board of Directors.

Generation

Electricity available from Generation’s owned or contracted generation supply in excess of Generation’s obligations to customers, including portions of the Utility Registrants' retail load, is sold into the wholesale markets.

To reduce commodity price risk caused by market fluctuations, Generation enters into non-derivative contracts as well as derivative contracts, including swaps, futures, forwards, and options, with approved counterparties to hedge anticipated exposures.

Generation uses derivative instruments as economic hedges to mitigate exposure to fluctuations in commodity prices.

We expect the settlement of the majority of our economic hedges will occur during 2022 through 2024.

In general, increases and decreases in forward market prices have a positive and negative impact, respectively, on Generation’s owned and contracted generation positions which have not been hedged.

For merchant revenues not already hedged via comprehensive state programs, such as the CMC in Illinois, we utilize a three-year ratable sales plan to align our hedging strategy with our financial objectives.

The prompt three-year merchant revenues are hedged on an approximate rolling 90%/60%/30% basis.

We may also enter transactions that are outside of this ratable hedging program.As of December 31, 2021, the percentage of expected generation hedged for the Mid-Atlantic, Midwest, New York, and ERCOT reportable segments is 92%-95% and 73%-76% for 2022 and 2023, respectively.

The percentage of expected generation hedged is the amount of equivalent sales divided by the expected generation.

Expected generation is the volume of energy that best represents our commodity position in energy markets from owned or contracted generation based upon a simulated dispatch model that makes assumptions regarding future market conditions, which are calibrated to market quotes for power, fuel, load following products and options.

Equivalent sales represent all hedging products, which include economic hedges, CMC payments, and certain non-derivative contracts.

A portion of Generation’s hedging strategy may be accomplished with fuel products based on assumed correlations between power and fuel prices, which routinely change in the market.

Market price risk exposure is the risk of a change in the value of unhedged positions.

The forecasted market price risk exposure for Generation’s entire economic hedge portfolio associated with a $5/MWh reduction in the annual average around-the-clock energy price based on December 31, 2021 market conditions and hedged position would be a decrease in pre-tax net income of approximately $20 million and $243 million for 2022 and 2023, respectively.

Power price sensitivities are derived by adjusting power price assumptions while keeping all other price inputs constant.

Generation actively manages its portfolio to mitigate market price risk exposure for its unhedged position.

Actual results could differ depending on the specific timing of, and markets affected by, price changes, as well as future changes in Generation’s portfolio.

Fuel Procurement

Generation procures natural gas through long-term and short-term contracts, and spot-market purchases.

Nuclear fuel assemblies are obtained predominantly through long-term uranium concentrate supply contracts, contracted conversion services, contracted enrichment services, or a combination thereof, and contracted fuel fabrication services.

The supply markets for uranium concentrates and certain nuclear fuel services are subject to price fluctuations and availability restrictions.

Supply market conditions may make Generation’s procurement contracts subject to credit risk related to the potential non-performance of counterparties to deliver the contracted commodity or service at the contracted prices.

Utility Registrants

PECO, BGE, Pepco, DPL, and ACE do not execute derivatives for speculative purposes.

Trading and Non-Trading Marketing Activities

The following table detailing Exelon’s (including Generation's) and ComEd’s trading and non-trading marketing activities is included to address the recommended disclosures by the energy industry’s Committee of Chief Risk Officers (CCRO).

The following table provides detail on changes in Exelon’s and ComEd’s commodity mark-to-market net asset or liability balance sheet position from December 31, 2019 to December 31, 2021.

It indicates the drivers behind changes in the balance sheet amounts.

This table incorporates the mark-to-market activities that are immediately recorded in earnings.

This table excludes all NPNS contracts and does not segregate proprietary trading activity.

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | Exelon | | | | | | | | | | | | ComEd | | | | | | | | | | | | | | |

| Balance as of December 31, 2019 | | | $ | 567 | | (a) | | | | | | | | | $ | (301) | | | | | | | | | | | | | |

| Total change in fair value during 2020 of contracts recorded in result of operations | | | (203) | | | | | | | | | | | | — | | | | | | | | | | | | | | |

| Reclassification to realized at settlement of contracts recorded in results of operations | | | 469 | | | | | | | | | | | | — | | | | | | | | | | | | | | |

| Changes in allocated collateral | | | (513) | | | | | | | | | | | | — | | | | | | | | | | | | | | |

[removed: As of December 31, 2021,] Exelon [removed: was] [added: is] a utility services holding company engaged in the [removed: generation, delivery, and marketing of] energy [removed: through Generation and the energy] distribution and transmission businesses through ComEd, PECO, BGE, Pepco, DPL, and ACE.

See Note [removed: 26] [added: 2] – [removed: Separation] [added: Discontinued Operations] of the Combined Notes to Consolidated Financial Statements for additional information.

| Name of [removed: Registrant / Subsidiary] [added: Registrant] | | | | | | Business | | | | | | Service Territories | | |

| Commonwealth Edison [removed: Company (registrant)] [added: Company] | | | | | | Purchase and regulated retail sale of electricity | | | | | | Northern Illinois, including the City of Chicago | | |

| PECO Energy [removed: Company (registrant)] [added: Company] | | | | | | Purchase and regulated retail sale of electricity and natural gas | | | | | | Southeastern Pennsylvania, including the City of Philadelphia (electricity) | | |

| Baltimore Gas and Electric [removed: Company (registrant)] [added: Company] | | | | | | Purchase and regulated retail sale of electricity and natural gas | | | | | | Central Maryland, including the City of Baltimore (electricity and natural gas) | | |

| Pepco Holdings [removed: LLC (registrant)] [added: LLC] | | | | | | Utility services holding company engaged, through its reportable [removed: segments] [added: segments:] Pepco, DPL, and ACE | | | | | | Service Territories of Pepco, DPL, and ACE | | |

| Potomac Electric Power [removed: Company (registrant)] [added: Company] | | | | | | Purchase and regulated retail sale of electricity | | | | | | District of Columbia and Major portions of Montgomery and Prince George’s Counties, Maryland | | |

| Delmarva Power & Light [removed: Company (registrant)] [added: Company] | | | | | | Purchase and regulated retail sale of electricity and natural gas | | | | | | Portions of Delaware and Maryland (electricity) | | |

| Atlantic City Electric [removed: Company (registrant)] [added: Company] | | | | | | Purchase and regulated retail sale of electricity | | | | | | Portions of Southern New Jersey | | |

PHI also has a business services subsidiary, PHISCO, which provides a variety of support services at cost, including legal, [removed: accounting,] [added: finance,] engineering, customer operations, distribution and transmission planning, asset management, system operations, and power procurement, to PHI operating companies.

[added: The results of Exelon’s corporate] operations are presented as “Other” within the consolidated financial statements and include intercompany eliminations unless otherwise disclosed.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF [removed: OPERATIONS] [added: OPERATIONS, Liquidity and Capital Resources,] for additional information [removed: of Generation’s electric supply sources.][added: regarding projected 2023 capital expenditures.]

See Note [removed: 7] [added: 3] — [removed: Early Plant Retirements] [added: Regulatory Matters] of the Combined Notes to Consolidated Financial Statements for additional information on [removed: Byron and Dresden.][added: CEJA.]

[removed: For a discussion of matters associated with Generation’s contracts with the DOE for the disposal of SNF, see] [added: See] Note [removed: 19] [added: 3] — [added: Regulatory Matters and Note 18 —] Commitments and Contingencies of the Combined Notes to Consolidated Financial [added: Statements for additional information regarding the Registrants’ environmental matters, remediation efforts, and related impacts to the Registrants’ Consolidated Financial] Statements.

The following table presents the size of service territories, populations of each service territory, and the number of customers within each service territory for the Utility Registrants as of December 31, [removed: 2021:][added: 2022:]

| Electric | | | | | | 11,450 | | | | | | [removed: 2,100] [added: 1,900] | | | | | | 2,300 | | | | | | 650 | | | | | | 5,400 | | | | | | 2,750 | | |

| Electric | | | | | | 9.3 | | | | | | [removed: 4.0] [added: 4.1] | | | | | | 3.0 | | | | | | 2.4 | | | | | | 1.5 | | | | | | 1.2 | | |

| Total(b) | | | | | | 9.3 | | | | | | [removed: 4.0] [added: 4.1] | | | | | | [removed: 3.1] [added: 3.2] | | | | | | 2.4 | | | | | | 1.5 | | | | | | 1.2 | | |

On September 15, 2021, Illinois passed [removed: the Clean Energy Law,] [added: CEJA,] which contains requirements for ComEd to transition away from the performance-based rate formula by the end of 2022 and would allow for the submission of either a general rate or multi-year rate plan.

[removed: PECO's, BGE's,] [added: PECO's] and DPL's electric and gas distribution costs and [removed: Pepco's and] ACE's electric distribution costs have generally been recovered through [removed: traditional] rate case [removed: proceedings.][added: proceedings, with PECO utilizing a fully projected future test year while DPL and ACE utilize a historical test year.]

[removed: However,] [added: BGE’s electric and gas distribution costs and Pepco’s and DPL Maryland's electric distribution costs are currently recovered through multi-year rate case proceedings, as] the MDPSC and the DCPSC allow utilities to file multi-year rate plans.

DPL customers, with the exception of certain commercial and industrial customers, do not have the [removed: choice to purchase natural gas from competitive natural gas suppliers.]

[removed: PECO,][added: | PECO | | | 1,368 | | | | | | 2 | | | | | | — | | | | | | — | | |]

[added: PECO,] BGE, and DPL also retain significant default service obligations to provide natural gas to certain groups of customers in their respective service areas who do not choose a competitive natural gas supplier.

The Utility Registrants' electric supply for its customers is primarily procured through contracts as [removed: required] [added: directed] by their respective state [removed: commissions.][added: laws and regulatory commission actions.]

The Utility Registrants procure electricity supply from various approved [removed: bidders, including Generation.][added: bidders or from purchases on the PJM operated markets.]

PECO's, BGE’s, and DPL's natural gas supplies are purchased from a number of suppliers for terms [removed: of up to] [added: that currently do not exceed] three years.

PECO, BGE, and DPL [added: each] have annual firm [removed: supply and] transportation contracts of [removed: 137,000] [added: 443,000] mmcf, 268,000 [removed: mmcf] [added: mmcf,] and [removed: 61,000] [added: 44,000] mmcf, [removed: respectively.][added: respectively, for delivery of gas.]

[removed: In addition, to] [added: To] supplement gas [added: transportation and] supply at times of heavy winter demands and in the event of temporary emergencies, PECO, BGE, and DPL have available storage capacity from the following sources:

| | | | LNG Facility | | | | | | Propane-Air Plant | | | | | | Underground Storage Service [removed: Agreements (a)] [added: Agreements(a)] | | |

(a)Natural gas from underground storage represents approximately [removed: 28%, 20%,] [added: 27%, 42%,] and 33% of PECO's, BGE’s, and DPL's [removed: 2021-2022] [added: 2022-2023] heating season planned supplies, respectively.

PJM is the transmission provider under, and the administrator of, the PJM [removed: Open Access Transmission Tariff (PJM Tariff).][added: Tariff.]

Under the PJM Tariff, transmission service is provided on a region-wide, open-access basis using the transmission facilities of the PJM transmission [removed: owners at rates based on the costs of transmission service.][added: owners.]

[removed: In 2021, the] [added: Exelon's] businesses [removed: remained] [added: remain] focused on maintaining industry leading operational excellence, meeting or exceeding their financial commitments, ensuring timely recovery on investments to enable customer benefits, supporting [removed: enactment of] clean energy [removed: policies,] [added: policies including those that advance our jurisdictions' clean energy targets,] and continued commitment to corporate responsibility.

The Utility Registrants make these investments [added: prudently] at [removed: the lowest] [added: a] reasonable cost to customers.

[removed: Additionally, the Utility Registrants anticipate making significant future] [added: These] investments [removed: in smart grid technology, transmission projects, gas infrastructure, and electric system improvement projects, providing] [added: provide] greater reliability, improved service for our customers, increased capacity to accommodate new [removed: technologies,] [added: technologies] and [added: support] a [added: cleaner grid, and a] stable return for the company.

Management continually evaluates growth opportunities aligned with Exelon’s businesses, [removed: assets] [added: assets,] and [removed: markets] [added: markets,] leveraging Exelon’s expertise in those areas and offering sustainable returns.

The Utility Registrants anticipate investing approximately [removed: $29] [added: $31] billion over the next four years in electric and natural gas infrastructure improvements and modernization projects, including smart grid technology, storm [added: hardening, advanced reliability technologies, and transmission projects, which is projected to result in an increase to current rate base of approximately $18 billion by the end of 2026.]

The Utility Registrants invest in rate base [removed: where beneficial] [added: that supports service] to [added: our] customers and the [removed: community by increasing] [added: community, including investments that sustain and improve] reliability and [added: resiliency and that enhance] the service experience [removed: or otherwise meeting customer needs.][added: of our customers.]

The separation was completed on February 1, 2022, creating two publicly traded companies, Exelon and Constellation.

On February 3, 2022, the ICC approved a tariff that establishes the process under which ComEd will reconcile its 2022 and 2023 rate year revenue requirements with actual costs.

ComEd filed a petition with the ICC seeking approval of a multi-year rate plan (MRP) for 2024-2027 on January 17, 2023.

choice to purchase natural gas from competitive natural gas suppliers.

Exelon does not generate the electricity it delivers.

ComEd, with limited exceptions, earns a return on its energy efficiency costs through a regulatory asset.

BGE, Pepco Maryland, DPL Maryland, and ACE earn a return on most of their energy efficiency and demand response program costs through a regulatory asset.

Following the separation on February 1, 2022, Exelon is now a Distribution and Transmission company, focused on delivering electricity and natural gas service to our customers and communities.

The jurisdictions in which Exelon has operations have set some of the nation's leading clean energy targets and our strategy is to enable that future for all our stakeholders.

Exelon's quantitative goals include its Scope 1 and 2 GHG emissions, with the exception of Scope 2 emissions associated with system losses of electric power delivered to customers ("line losses"), and build upon Exelon's long-standing commitment to reducing our GHG emissions.

Exelon's Path to Clean efforts extend beyond these quantitative goals to include efforts such as customer energy efficiency programs, which support reductions in customers' direct emissions and have the potential to reduce Exelon's Scope 3 emissions and Scope 2 line losses as well.

| Female(a)(b)(c) | | | | | | 5,300 | | | | | | | | | | | | 1,535 | | | | | | 752 | | | | | | 786 | | | | | | 1,270 | | | | | | 329 | | | | | | 139 | | | | | | 109 | | |

| People of Color(b)(c) | | | | | | 7,519 | | | | | | | | | | | | 2,575 | | | | | | 990 | | | | | | 1,170 | | | | | | 1,803 | | | | | | 865 | | | | | | 203 | | | | | | 145 | | |

| Aged <30 | | | | | | 2,026 | | | | | | | | | | | | 721 | | | | | | 361 | | | | | | 286 | | | | | | 424 | | | | | | 169 | | | | | | 85 | | | | | | 61 | | |

| Aged 30-50 | | | | | | 10,548 | | | | | | | | | | | | 3,728 | | | | | | 1,455 | | | | | | 1,819 | | | | | | 2,271 | | | | | | 739 | | | | | | 465 | | | | | | 357 | | |

| Aged >50 | | | | | | 6,489 | | | | | | | | | | | | 1,907 | | | | | | 1,070 | | | | | | 1,061 | | | | | | 1,466 | | | | | | 442 | | | | | | 341 | | | | | | 203 | | |

| Total Employees(d) | | | | | | 19,063 | | | | | | | | | | | | 6,356 | | | | | | 2,886 | | | | | | 3,166 | | | | | | 4,161 | | | | | | 1,350 | | | | | | 891 | | | | | | 621 | | |

| Female(a)(b)(c) | | | | | | 961 | | | | | | | | | | | | 235 | | | | | | 139 | | | | | | 122 | | | | | | 206 | | | | | | 51 | | | | | | 13 | | | | | | 21 | | |

| People of Color(b)(c) | | | | | | 1,086 | | | | | | | | | | | | 331 | | | | | | 134 | | | | | | 166 | | | | | | 276 | | | | | | 116 | | | | | | 32 | | | | | | 22 | | |

| Aged 30-50 | | | | | | 1,715 | | | | | | | | | | | | 510 | | | | | | 182 | | | | | | 265 | | | | | | 395 | | | | | | 120 | | | | | | 58 | | | | | | 40 | | |

| Aged >50 | | | | | | 1,286 | | | | | | | | | | | | 363 | | | | | | 190 | | | | | | 163 | | | | | | 276 | | | | | | 61 | | | | | | 57 | | | | | | 40 | | |

| Within 10 years of retirement eligibility | | | | | | 1,787 | | | | | | | | | | | | 520 | | | | | | 238 | | | | | | 226 | | | | | | 379 | | | | | | 91 | | | | | | 68 | | | | | | 55 | | |

| Total Employees in Management(d) | | | | | | 3,030 | | | | | | | | | | | | 880 | | | | | | 381 | | | | | | 432 | | | | | | 677 | | | | | | 181 | | | | | | 117 | | | | | | 82 | | |

(b)To effectuate Exelon's pay equity goals, Exelon conducts analysis on gender and racial pay equity.

(c)Information concerning women and people of color is based on self-disclosed information.

| Retirement Age | | | | | | 3.71 | | % | | | | | | | | | | 4.09 | | % | | | | 4.10 | | % | | | | 3.48 | | % | | | | 3.79 | | % | | | | 3.74 | | % | | | | 4.42 | | % | | | | 3.88 | | % |

| Voluntary | | | | | | 2.79 | | % | | | | | | | | | | 2.22 | | % | | | | 2.71 | | % | | | | 1.76 | | % | | | | 2.52 | | % | | | | 2.81 | | % | | | | 1.46 | | % | | | | 1.84 | | % |

| Non-Voluntary | | | | | | 0.81 | | % | | | | | | | | | | 0.60 | | % | | | | 1.10 | | % | | | | 1.06 | | % | | | | 1.02 | | % | | | | 1.95 | | % | | | | 0.47 | | % | | | | 0.68 | | % |

| Exelon | | | 8,379 | | | | | | 10 | | | | | | 2 | | | | | | 906 | | |

| ComEd | | | 3,477 | | | | | | 2 | | | | | | — | | | | | | — | | |

| BGE | | | 1,414 | | | | | | 1 | | | | | | — | | | | | | — | | |

| PHI | | | 2,113 | | | | | | 5 | | | | | | 2 | | | | | | 906 | | |

| Pepco | | | 890 | | | | | | 1 | | | | | | 1 | | | | | | 890 | | |

| DPL | | | 621 | | | | | | 2 | | | | | | — | | | | | | — | | |

| ACE | | | 401 | | | | | | 2 | | | | | | 1 | | | | | | 16 | | |

The Audit and Risk Committee oversees compliance with environmental laws and regulations, including environmental risks related to Exelon's operations and facilities, as well as SEC disclosures related to environmental matters.

The Exelon Board of Directors has general oversight responsibilities for ESG matters, including strategies and efforts to protect and improve the quality of the environment.

In addition, PECO, BGE, and DPL, as distributors of natural gas are regulated with respect to reporting of natural gas (methane) leakage on the natural gas systems and consumer use of such natural gas.

Exelon uses definitions and protocols provided by the World Resources Institute for its GHG inventory.

The majority of these operations-driven emissions are fugitive emissions from the gas delivery systems of Registrants PECO, BGE, and DPL.

On February 21, 2021, Exelon’s Board of Directors approved a plan to separate the Utility Registrants and Generation, creating two publicly traded companies with the resources necessary to best serve customers and sustain long-term investment and operating excellence.

The separation was completed on February 1, 2022 and gives each company the financial and strategic independence to focus on its specific customer needs, while executing its core business strategy.

| | | | | | | | | | | | | | | |

| Constellation Energy Generation, LLC (formerly Exelon Generation Company, LLC) (subsidiary) | | | | | | Generation, physical delivery, and marketing of power across multiple geographical regions through its customer-facing business, Constellation, which sells electricity to both wholesale and retail customers. Generation also sells natural gas, renewable energy, and other energy-related products and services. | | | | | | Five reportable segments: Mid-Atlantic, Midwest, New York, ERCOT, and Other Power Regions | | |

The results of Exelon’s corporate

Generation

Generation, one of the largest competitive electric generation companies in the United States as measured by owned and contracted MW, physically delivers and markets power across multiple geographic regions through its customer-facing business, Constellation.

Constellation sells electricity and natural gas, including renewable energy and associated attributes, in competitive domestic energy markets to both wholesale and retail customers.

Generation leverages its generation portfolio to serve customers under both long-term and short-term contracts, as well as spot market sales.

Generation operates in well-developed energy markets and employs integrated and ratable hedging strategies to manage commodity price volatility.

Generation's fleet also provides geographic and supply source diversity.

Generation’s customers include distribution utilities, municipalities, cooperatives, and commercial, industrial, governmental, and residential customers in competitive markets.

Generation’s customer-facing activities foster development and delivery of other innovative energy-related products and services for its customers.

Generation is a public utility as defined under the Federal Power Act and is subject to FERC’s exclusive ratemaking jurisdiction over wholesale sales of electricity and the transmission of electricity in interstate commerce.

Under the Federal Power Act, FERC has the authority to grant or deny market-based rates for sales of energy, capacity, and ancillary services to ensure that such sales are just and reasonable.

FERC’s jurisdiction over ratemaking includes the authority to suspend the market-based rates of utilities and set cost-based rates should FERC find that its previous grant of market-based rates authority is no longer just and reasonable.

Other matters subject to FERC jurisdiction include, but are not limited to, third-party financings; review of mergers; dispositions of jurisdictional facilities and acquisitions of securities of another public utility or an existing operational generating facility; affiliate transactions; intercompany financings and cash management arrangements; certain internal corporate reorganizations; and certain holding company acquisitions of public utility and holding company securities.

RTOs and ISOs exist in a number of regions to provide transmission service across multiple transmission systems.

FERC has approved PJM, MISO, ISO-NE, and SPP as RTOs and CAISO and NYISO as ISOs.

These entities are responsible for regional planning, managing transmission congestion, developing wholesale markets for energy and capacity, maintaining reliability, market monitoring, the scheduling of physical power sales brokered through ICE and NYMEX, and the elimination or reduction of redundant transmission charges imposed by multiple transmission providers when wholesale customers take transmission service across several transmission systems.

ERCOT is not subject to regulation by FERC but performs a similar function in Texas to that performed by RTOs in markets regulated by FERC.

Specific operations of Generation are also subject to the jurisdiction of various other Federal, state, regional, and local agencies, including the NRC, and Federal and state environmental protection agencies.

Additionally, Generation is subject to NERC mandatory reliability standards, which protect the nation’s bulk power system against potential disruptions from cyber and physical security breaches.

Generating Resources

At December 31, 2021, the generating resources of Generation consisted of the following:

| | | | | | |

| --- | --- | --- | --- | --- | --- |

| Type of Capacity | | | MW | | |

| Owned generation assets(a) | | | | | |

| Nuclear | | | 20,899 | | |

| Fossil (primarily natural gas and oil) | | | 8,819 | | |

| Renewable(b) | | | 2,682 | | |

| Owned generation assets | | | 32,400 | | |

| Contracted generation(c) | | | 4,102 | | |

| Total generating resources | | | 36,502 | | |

__________

(a)Net generation capacity is stated at proportionate ownership share.

See ITEM 2.

PROPERTIES—Generation for additional information.

(b)Includes wind, hydroelectric, and solar generating assets.

For information regarding material lawsuits and proceedings, see Note 3 — Regulatory Matters and Note [removed: 19] [added: 18] — Commitments and Contingencies of the Combined Notes to Consolidated Financial Statements.

For the Fiscal Year Ended December 31, [removed: 2021][added: 2022]

| | | | | | | (an Illinois corporation) 10 South Dearborn Street [removed: 49th Floor] Chicago, Illinois 60603-2300 (312) 394-4321 | | | | | | | | |

The estimated aggregate market value of the voting and non-voting common equity held by nonaffiliates of each registrant as of [removed: June 30, 2021] [added: August 5, 2022] was as follows:

| Exelon Corporation Common Stock, without par value | | | [removed: $43,290,833,498] [added: 994,126,931] | | |

The number of shares outstanding of each registrant’s common stock as of January 31, [removed: 2022] [added: 2023] was as follows:

| Exelon Corporation Common Stock, without par value | | | [removed: 980,136,968] [added: $44,452,390,343] | | |

| Commonwealth Edison Company Common Stock, $12.50 par value | | | [removed: 127,021,391] [added: 127,021,394] | | |

Portions of the Exelon Proxy Statement for the [removed: 2021] [added: 2022] Annual Meeting of Shareholders and the Commonwealth Edison Company [removed: 2021] [added: 2022] Information Statement are incorporated by reference in Part III.

| [GLOSSARY OF TERMS AND [removed: ABBREVIATIONS](#i0fa971ac9e834218957059819155291f_13)] [added: ABBREVIATIONS](#i3ce3cbaa20734bd2af35ff37bb7ed87e_13)] | | | | | | [removed: [1](#i0fa971ac9e834218957059819155291f_13)] [added: [1](#i3ce3cbaa20734bd2af35ff37bb7ed87e_13)] | | |

| [FILING [removed: FORMAT](#i0fa971ac9e834218957059819155291f_16)] [added: FORMAT](#i3ce3cbaa20734bd2af35ff37bb7ed87e_16)] | | | | | | [removed: [6](#i0fa971ac9e834218957059819155291f_16)] [added: [5](#i3ce3cbaa20734bd2af35ff37bb7ed87e_16)] | | |

| [CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING [removed: INFORMATION](#i0fa971ac9e834218957059819155291f_19)] [added: INFORMATION](#i3ce3cbaa20734bd2af35ff37bb7ed87e_19)] | | | | | | [removed: [6](#i0fa971ac9e834218957059819155291f_19)] [added: [5](#i3ce3cbaa20734bd2af35ff37bb7ed87e_19)] | | |

| [WHERE TO FIND MORE [removed: INFORMATION](#i0fa971ac9e834218957059819155291f_22)] [added: INFORMATION](#i3ce3cbaa20734bd2af35ff37bb7ed87e_22)] | | | | | | [removed: [6](#i0fa971ac9e834218957059819155291f_22)] [added: [5](#i3ce3cbaa20734bd2af35ff37bb7ed87e_22)] | | |

| [ITEM [removed: 1.](#i0fa971ac9e834218957059819155291f_28)] [added: 1.](#i3ce3cbaa20734bd2af35ff37bb7ed87e_28)] | | | [removed: [BUSINESS](#i0fa971ac9e834218957059819155291f_28)] [added: [BUSINESS](#i3ce3cbaa20734bd2af35ff37bb7ed87e_28)] | | | [removed: [7](#i0fa971ac9e834218957059819155291f_28)] [added: [6](#i3ce3cbaa20734bd2af35ff37bb7ed87e_28)] | | |

| | | | [Utility [removed: Operations](#i0fa971ac9e834218957059819155291f_37)] [added: Operations](#i3ce3cbaa20734bd2af35ff37bb7ed87e_37)] | | | [removed: [15](#i0fa971ac9e834218957059819155291f_37)] [added: [7](#i3ce3cbaa20734bd2af35ff37bb7ed87e_37)] | | |

| | | | [Exelon's Strategy and [removed: Outlook](#i0fa971ac9e834218957059819155291f_6640)] [added: Outlook](#i3ce3cbaa20734bd2af35ff37bb7ed87e_40)] | | | [removed: [18](#i0fa971ac9e834218957059819155291f_6640)] [added: [10](#i3ce3cbaa20734bd2af35ff37bb7ed87e_40)] | | |

| | | | [Environmental Matters and [removed: Regulation](#i0fa971ac9e834218957059819155291f_43)] [added: Regulation](#i3ce3cbaa20734bd2af35ff37bb7ed87e_46)] | | | [removed: [21](#i0fa971ac9e834218957059819155291f_43)] [added: [13](#i3ce3cbaa20734bd2af35ff37bb7ed87e_46)] | | |

| | | | [Executive Officers of the [removed: Registrants](#i0fa971ac9e834218957059819155291f_46)] [added: Registrants](#i3ce3cbaa20734bd2af35ff37bb7ed87e_49)] | | | [removed: [25](#i0fa971ac9e834218957059819155291f_46)] [added: [18](#i3ce3cbaa20734bd2af35ff37bb7ed87e_49)] | | |

| [ITEM [removed: 1A.](#i0fa971ac9e834218957059819155291f_49)] [added: 1A.](#i3ce3cbaa20734bd2af35ff37bb7ed87e_52)] | | | [RISK [removed: FACTORS](#i0fa971ac9e834218957059819155291f_49)] [added: FACTORS](#i3ce3cbaa20734bd2af35ff37bb7ed87e_52)] | | | [removed: [29](#i0fa971ac9e834218957059819155291f_49)] [added: [22](#i3ce3cbaa20734bd2af35ff37bb7ed87e_52)] | | |

| [ITEM [removed: 1B.](#i0fa971ac9e834218957059819155291f_52)] [added: 1B.](#i3ce3cbaa20734bd2af35ff37bb7ed87e_55)] | | | [UNRESOLVED STAFF [removed: COMMENTS](#i0fa971ac9e834218957059819155291f_52)] [added: COMMENTS](#i3ce3cbaa20734bd2af35ff37bb7ed87e_55)] | | | [removed: [40](#i0fa971ac9e834218957059819155291f_52)] [added: [33](#i3ce3cbaa20734bd2af35ff37bb7ed87e_55)] | | |

| [ITEM [removed: 2.](#i0fa971ac9e834218957059819155291f_55)] [added: 2.](#i3ce3cbaa20734bd2af35ff37bb7ed87e_58)] | | | [removed: [PROPERTIES](#i0fa971ac9e834218957059819155291f_55)] [added: [PROPERTIES](#i3ce3cbaa20734bd2af35ff37bb7ed87e_58)] | | | [removed: [41](#i0fa971ac9e834218957059819155291f_55)] [added: [34](#i3ce3cbaa20734bd2af35ff37bb7ed87e_58)] | | |

| [ITEM [removed: 3.](#i0fa971ac9e834218957059819155291f_64)] [added: 3.](#i3ce3cbaa20734bd2af35ff37bb7ed87e_67)] | | | [LEGAL [removed: PROCEEDINGS](#i0fa971ac9e834218957059819155291f_64)] [added: PROCEEDINGS](#i3ce3cbaa20734bd2af35ff37bb7ed87e_67)] | | | [removed: [45](#i0fa971ac9e834218957059819155291f_64)] [added: [35](#i3ce3cbaa20734bd2af35ff37bb7ed87e_67)] | | |

| [ITEM [removed: 4.](#i0fa971ac9e834218957059819155291f_6962)] [added: 4.](#i3ce3cbaa20734bd2af35ff37bb7ed87e_73)] | | | [MINE SAFETY [removed: DISCLOSURES](#i0fa971ac9e834218957059819155291f_6962)] [added: DISCLOSURES](#i3ce3cbaa20734bd2af35ff37bb7ed87e_73)] | | | [removed: [46](#i0fa971ac9e834218957059819155291f_6962)] [added: [35](#i3ce3cbaa20734bd2af35ff37bb7ed87e_73)] | | |

| [ITEM [removed: 5.](#i0fa971ac9e834218957059819155291f_76)] [added: 5.](#i3ce3cbaa20734bd2af35ff37bb7ed87e_79)] | | | [MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS, AND ISSUER PURCHASES OF EQUITY [removed: SECURITIES](#i0fa971ac9e834218957059819155291f_76)] [added: SECURITIES](#i3ce3cbaa20734bd2af35ff37bb7ed87e_79)] | | | [removed: [47](#i0fa971ac9e834218957059819155291f_76)] [added: [36](#i3ce3cbaa20734bd2af35ff37bb7ed87e_79)] | | |

| [ITEM [removed: 7.](#i0fa971ac9e834218957059819155291f_109)] [added: 7.](#i3ce3cbaa20734bd2af35ff37bb7ed87e_112)] | | | [MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF [removed: OPERATIONS](#i0fa971ac9e834218957059819155291f_109)] [added: OPERATIONS](#i3ce3cbaa20734bd2af35ff37bb7ed87e_112)] | | | [removed: [52](#i0fa971ac9e834218957059819155291f_109)] [added: [41](#i3ce3cbaa20734bd2af35ff37bb7ed87e_112)] | | |

| | | | [Financial Results of [removed: Operations](#i0fa971ac9e834218957059819155291f_118)] [added: Operations](#i3ce3cbaa20734bd2af35ff37bb7ed87e_121)] | | | [removed: [53](#i0fa971ac9e834218957059819155291f_118)] [added: [42](#i3ce3cbaa20734bd2af35ff37bb7ed87e_121)] | | |

| | | | [Significant [removed: 2021 Transactions] [added: 202](#i3ce3cbaa20734bd2af35ff37bb7ed87e_124)[2](#i3ce3cbaa20734bd2af35ff37bb7ed87e_124) [Transactions] and Recent [removed: Developments](#i0fa971ac9e834218957059819155291f_121)] [added: Developments](#i3ce3cbaa20734bd2af35ff37bb7ed87e_124)] | | | [removed: [56](#i0fa971ac9e834218957059819155291f_121)] [added: [45](#i3ce3cbaa20734bd2af35ff37bb7ed87e_124)] | | |

| | | | [Other Key Business Drivers and Management [removed: Strategies](#i0fa971ac9e834218957059819155291f_130)] [added: Strategies](#i3ce3cbaa20734bd2af35ff37bb7ed87e_133)] | | | [removed: [60](#i0fa971ac9e834218957059819155291f_130)] [added: [48](#i3ce3cbaa20734bd2af35ff37bb7ed87e_133)] | | |

| | | | [Critical Accounting Policies and [removed: Estimates](#i0fa971ac9e834218957059819155291f_133)] [added: Estimates](#i3ce3cbaa20734bd2af35ff37bb7ed87e_136)] | | | [removed: [61](#i0fa971ac9e834218957059819155291f_133)] [added: [49](#i3ce3cbaa20734bd2af35ff37bb7ed87e_136)] | | |

| | | | [Results of [removed: Operations](#i0fa971ac9e834218957059819155291f_136)] [added: Operations](#i3ce3cbaa20734bd2af35ff37bb7ed87e_139)] | | | [removed: [72](#i0fa971ac9e834218957059819155291f_142)] [added: [56](#i3ce3cbaa20734bd2af35ff37bb7ed87e_142)] | | |

| | | | [Commonwealth Edison [removed: Company](#i0fa971ac9e834218957059819155291f_142)] [added: Company](#i3ce3cbaa20734bd2af35ff37bb7ed87e_142)] | | | [removed: [72](#i0fa971ac9e834218957059819155291f_142)] [added: [56](#i3ce3cbaa20734bd2af35ff37bb7ed87e_142)] | | |

| | | | [PECO Energy [removed: Company](#i0fa971ac9e834218957059819155291f_145)] [added: Company](#i3ce3cbaa20734bd2af35ff37bb7ed87e_145)] | | | [removed: [75](#i0fa971ac9e834218957059819155291f_145)] [added: [59](#i3ce3cbaa20734bd2af35ff37bb7ed87e_145)] | | |

| | | | [Baltimore Gas and Electric [removed: Company](#i0fa971ac9e834218957059819155291f_148)] [added: Company](#i3ce3cbaa20734bd2af35ff37bb7ed87e_148)] | | | [removed: [79](#i0fa971ac9e834218957059819155291f_148)] [added: [63](#i3ce3cbaa20734bd2af35ff37bb7ed87e_148)] | | |

| | | | [Pepco Holdings [removed: LLC](#i0fa971ac9e834218957059819155291f_151)] [added: LLC](#i3ce3cbaa20734bd2af35ff37bb7ed87e_151)] | | | [removed: [82](#i0fa971ac9e834218957059819155291f_151)] [added: [66](#i3ce3cbaa20734bd2af35ff37bb7ed87e_151)] | | |

| | | | [Potomac Electric Power [removed: Company](#i0fa971ac9e834218957059819155291f_154)] [added: Company](#i3ce3cbaa20734bd2af35ff37bb7ed87e_154)] | | | [removed: [83](#i0fa971ac9e834218957059819155291f_154)] [added: [67](#i3ce3cbaa20734bd2af35ff37bb7ed87e_154)] | | |

| | | | [Delmarva Power & Light [removed: Company](#i0fa971ac9e834218957059819155291f_157)] [added: Company](#i3ce3cbaa20734bd2af35ff37bb7ed87e_157)] | | | [removed: [86](#i0fa971ac9e834218957059819155291f_157)] [added: [70](#i3ce3cbaa20734bd2af35ff37bb7ed87e_157)] | | |

| | | | [Atlantic City Electric [removed: Company](#i0fa971ac9e834218957059819155291f_160)] [added: Company](#i3ce3cbaa20734bd2af35ff37bb7ed87e_160)] | | | [removed: [90](#i0fa971ac9e834218957059819155291f_160)] [added: [74](#i3ce3cbaa20734bd2af35ff37bb7ed87e_160)] | | |

| | | | [Liquidity and Capital [removed: Resources](#i0fa971ac9e834218957059819155291f_163)] [added: Resources](#i3ce3cbaa20734bd2af35ff37bb7ed87e_166)] | | | [removed: [101](#i0fa971ac9e834218957059819155291f_163)] [added: [77](#i3ce3cbaa20734bd2af35ff37bb7ed87e_166)] | | |

| [ITEM [removed: 7A.](#i0fa971ac9e834218957059819155291f_169)] [added: 7A.](#i3ce3cbaa20734bd2af35ff37bb7ed87e_172)] | | | [QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET [removed: RISK](#i0fa971ac9e834218957059819155291f_169)] [added: RISK](#i3ce3cbaa20734bd2af35ff37bb7ed87e_172)] | | | [removed: [119](#i0fa971ac9e834218957059819155291f_169)] [added: [93](#i3ce3cbaa20734bd2af35ff37bb7ed87e_172)] | | |

| [ITEM [removed: 8.](#i0fa971ac9e834218957059819155291f_196)] [added: 8.](#i3ce3cbaa20734bd2af35ff37bb7ed87e_202)] | | | [FINANCIAL STATEMENTS AND SUPPLEMENTARY [removed: DATA](#i0fa971ac9e834218957059819155291f_196)] [added: DATA](#i3ce3cbaa20734bd2af35ff37bb7ed87e_202)] | | | [removed: [126](#i0fa971ac9e834218957059819155291f_196)] [added: [95](#i3ce3cbaa20734bd2af35ff37bb7ed87e_202)] | | |

| | | | [Exelon [removed: Corporation](#i0fa971ac9e834218957059819155291f_265)] [added: Corporation](#i3ce3cbaa20734bd2af35ff37bb7ed87e_265)] | | | [removed: [151](#i0fa971ac9e834218957059819155291f_265)] [added: [119](#i3ce3cbaa20734bd2af35ff37bb7ed87e_265)] | | |

| [PART I](#i3ce3cbaa20734bd2af35ff37bb7ed87e_25) | | | | | | | | |

| | | | [General](#i3ce3cbaa20734bd2af35ff37bb7ed87e_31) | | | [6](#i3ce3cbaa20734bd2af35ff37bb7ed87e_31) | | |

| | | | [Employees](#i3ce3cbaa20734bd2af35ff37bb7ed87e_43) | | | [11](#i3ce3cbaa20734bd2af35ff37bb7ed87e_43) | | |

| [PART II](#i3ce3cbaa20734bd2af35ff37bb7ed87e_76) | | | | | | | | |

| [ITEM 6.](#i3ce3cbaa20734bd2af35ff37bb7ed87e_82) | | | [\[RESERVED\]](#i3ce3cbaa20734bd2af35ff37bb7ed87e_82) | | | [40](#i3ce3cbaa20734bd2af35ff37bb7ed87e_82) | | |

| | | | [Exelon Corporation](#i3ce3cbaa20734bd2af35ff37bb7ed87e_115) | | | [41](#i3ce3cbaa20734bd2af35ff37bb7ed87e_115) | | |

| | | | [Executive Overview](#i3ce3cbaa20734bd2af35ff37bb7ed87e_118) | | | [41](#i3ce3cbaa20734bd2af35ff37bb7ed87e_118) | | |

| | | | [Pepco Holdings LLC](#i3ce3cbaa20734bd2af35ff37bb7ed87e_343) | | | [139](#i3ce3cbaa20734bd2af35ff37bb7ed87e_343) | | |

| | | | [1. Significant Accounting Policies](#i3ce3cbaa20734bd2af35ff37bb7ed87e_409) | | | [159](#i3ce3cbaa20734bd2af35ff37bb7ed87e_409) | | |

| | | | [2. Discontinued Operations](#i3ce3cbaa20734bd2af35ff37bb7ed87e_415) | | | [166](#i3ce3cbaa20734bd2af35ff37bb7ed87e_415) | | |

| | | | [3. Regulatory Matters](#i3ce3cbaa20734bd2af35ff37bb7ed87e_421) | | | [171](#i3ce3cbaa20734bd2af35ff37bb7ed87e_421) | | |

| | | | [5. Segment Information](#i3ce3cbaa20734bd2af35ff37bb7ed87e_436) | | | [192](#i3ce3cbaa20734bd2af35ff37bb7ed87e_436) | | |

| | | | [6. Accounts Receivable](#i3ce3cbaa20734bd2af35ff37bb7ed87e_445) | | | [199](#i3ce3cbaa20734bd2af35ff37bb7ed87e_445) | | |

| | | | [9. Asset Retirement Obligations](#i3ce3cbaa20734bd2af35ff37bb7ed87e_475) | | | [203](#i3ce3cbaa20734bd2af35ff37bb7ed87e_475) | | |

| | | | [10. Leases](#i3ce3cbaa20734bd2af35ff37bb7ed87e_481) | | | [204](#i3ce3cbaa20734bd2af35ff37bb7ed87e_481) | | |

| | | | [11. Asset Impairments](#i3ce3cbaa20734bd2af35ff37bb7ed87e_490) | | | [209](#i3ce3cbaa20734bd2af35ff37bb7ed87e_496) | | |

| | | | [12. Intangible Assets](#i3ce3cbaa20734bd2af35ff37bb7ed87e_496) | | | [209](#i3ce3cbaa20734bd2af35ff37bb7ed87e_496) | | |

| | | | [13. Income Taxes](#i3ce3cbaa20734bd2af35ff37bb7ed87e_502) | | | [211](#i3ce3cbaa20734bd2af35ff37bb7ed87e_502) | | |

| | | | [14. Retirement Benefits](#i3ce3cbaa20734bd2af35ff37bb7ed87e_511) | | | [218](#i3ce3cbaa20734bd2af35ff37bb7ed87e_511) | | |

| | | | [15. Derivative Financial Instruments](#i3ce3cbaa20734bd2af35ff37bb7ed87e_517) | | | [230](#i3ce3cbaa20734bd2af35ff37bb7ed87e_517) | | |

| | | | [16. Debt and Credit Agreements](#i3ce3cbaa20734bd2af35ff37bb7ed87e_523) | | | [233](#i3ce3cbaa20734bd2af35ff37bb7ed87e_523) | | |

| | | | [18. Commitments and Contingencies](#i3ce3cbaa20734bd2af35ff37bb7ed87e_541) | | | [248](#i3ce3cbaa20734bd2af35ff37bb7ed87e_541) | | |

| | | | [19. Shareholders' Equity](#i3ce3cbaa20734bd2af35ff37bb7ed87e_556) | | | [256](#i3ce3cbaa20734bd2af35ff37bb7ed87e_556) | | |

| | | | [20. Stock-Based Compensation Plans](#i3ce3cbaa20734bd2af35ff37bb7ed87e_562) | | | [257](#i3ce3cbaa20734bd2af35ff37bb7ed87e_562) | | |

| | | | [21. Changes in Accumulated Other Comprehensive Income](#i3ce3cbaa20734bd2af35ff37bb7ed87e_568) | | | [261](#i3ce3cbaa20734bd2af35ff37bb7ed87e_568) | | |

| | | | [22. Supplemental Financial Information](#i3ce3cbaa20734bd2af35ff37bb7ed87e_583) | | | [262](#i3ce3cbaa20734bd2af35ff37bb7ed87e_583) | | |

| | | | [23. Related Party Transactions](#i3ce3cbaa20734bd2af35ff37bb7ed87e_592) | | | [267](#i3ce3cbaa20734bd2af35ff37bb7ed87e_592) | | |

| [PART III](#i3ce3cbaa20734bd2af35ff37bb7ed87e_658) | | | | | | | | |

| [PART IV](#i3ce3cbaa20734bd2af35ff37bb7ed87e_676) | | | | | | | | |

| [SIGNATURES](#i3ce3cbaa20734bd2af35ff37bb7ed87e_751) | | | | | | [320](#i3ce3cbaa20734bd2af35ff37bb7ed87e_751) | | |

| | | | [Exelon Corporation](#i3ce3cbaa20734bd2af35ff37bb7ed87e_754) | | | [320](#i3ce3cbaa20734bd2af35ff37bb7ed87e_754) | | |

| | | | [Commonwealth Edison Company](#i3ce3cbaa20734bd2af35ff37bb7ed87e_760) | | | [321](#i3ce3cbaa20734bd2af35ff37bb7ed87e_760) | | |

| | | | [PECO Energy Company](#i3ce3cbaa20734bd2af35ff37bb7ed87e_763) | | | [322](#i3ce3cbaa20734bd2af35ff37bb7ed87e_763) | | |

| | | | [Pepco Holdings LLC](#i3ce3cbaa20734bd2af35ff37bb7ed87e_769) | | | [324](#i3ce3cbaa20734bd2af35ff37bb7ed87e_769) | | |

[Table of Cont](#i3ce3cbaa20734bd2af35ff37bb7ed87e_10)[ents](#i3ce3cbaa20734bd2af35ff37bb7ed87e_10)

| *Exelon Foundation* | | | | | | Independent, non-profit philanthropic organization | | |

| *Exelon InQB8R* | | | | | | Exelon InQB8R, LLC | | |

| Former Related Entities | | | | | | | | |

| *2021 Form 10-K* | | | | | | The Registrants' Annual Report on Form 10-K for the year ended December 31, 2021 filed with the SEC on February 25, 2022 | | |

| *2021 Recast Form 10-K* | | | | | | The Registrants' Current Report on Form 8-K filed with the SEC on June 30, 2022 to recast Exelon's consolidated financial statements and certain other financial information originally included in the 2021 Form 10-K | | |

| | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- |

| [PART I](#i0fa971ac9e834218957059819155291f_25) | | | | | | | | |

| | | | [General](#i0fa971ac9e834218957059819155291f_31) | | | [7](#i0fa971ac9e834218957059819155291f_31) | | |

| | | | [Constellation Energy Generation, LLC](#i0fa971ac9e834218957059819155291f_34) | | | [8](#i0fa971ac9e834218957059819155291f_34) | | |

| | | | [Employees](#i0fa971ac9e834218957059819155291f_40) | | | [19](#i0fa971ac9e834218957059819155291f_40) | | |

| | | | [Constellation Energy Generation, LLC](#i0fa971ac9e834218957059819155291f_58) | | | [41](#i0fa971ac9e834218957059819155291f_58) | | |

| | | | [The Utility Registrants](#i0fa971ac9e834218957059819155291f_61) | | | [44](#i0fa971ac9e834218957059819155291f_61) | | |

| [PART II](#i0fa971ac9e834218957059819155291f_73) | | | | | | | | |

| [ITEM 6.](#i0fa971ac9e834218957059819155291f_79) | | | [SELECTED FINANCIAL DATA](#i0fa971ac9e834218957059819155291f_79) | | | [51](#i0fa971ac9e834218957059819155291f_79) | | |

| | | | [Exelon Corporation](#i0fa971ac9e834218957059819155291f_112) | | | [52](#i0fa971ac9e834218957059819155291f_112) | | |

| | | | [Executive Overview](#i0fa971ac9e834218957059819155291f_115) | | | [52](#i0fa971ac9e834218957059819155291f_115) | | |

| | | | [Constellation Energy Generation, LLC](#i0fa971ac9e834218957059819155291f_139) | | | [93](#i0fa971ac9e834218957059819155291f_139) | | |

| | | | [Pepco Holdings LLC](#i0fa971ac9e834218957059819155291f_346) | | | [171](#i0fa971ac9e834218957059819155291f_346) | | |

| | | | [1. Significant Accounting Policies](#i0fa971ac9e834218957059819155291f_418) | | | [191](#i0fa971ac9e834218957059819155291f_418) | | |

| | | | [2. Mergers, Acquisitions, and Dispositions](#i0fa971ac9e834218957059819155291f_424) | | | [200](#i0fa971ac9e834218957059819155291f_424) | | |

| | | | [3. Regulatory Matters](#i0fa971ac9e834218957059819155291f_430) | | | [202](#i0fa971ac9e834218957059819155291f_430) | | |

| | | | [5. Segment Information](#i0fa971ac9e834218957059819155291f_442) | | | [225](#i0fa971ac9e834218957059819155291f_442) | | |

| | | | [6. Accounts Receivable](#i0fa971ac9e834218957059819155291f_451) | | | [236](#i0fa971ac9e834218957059819155291f_451) | | |

| | | | [7. Early Plant Retirements](#i0fa971ac9e834218957059819155291f_457) | | | [240](#i0fa971ac9e834218957059819155291f_457) | | |

| | | | [10. Asset Retirement Obligations](#i0fa971ac9e834218957059819155291f_481) | | | [246](#i0fa971ac9e834218957059819155291f_481) | | |

| | | | [11. Leases](#i0fa971ac9e834218957059819155291f_487) | | | [250](#i0fa971ac9e834218957059819155291f_487) | | |

| | | | [12. Asset Impairments](#i0fa971ac9e834218957059819155291f_496) | | | [255](#i0fa971ac9e834218957059819155291f_496) | | |

| | | | [13. Intangible Assets](#i0fa971ac9e834218957059819155291f_502) | | | [255](#i0fa971ac9e834218957059819155291f_502) | | |

| | | | [14. Income Taxes](#i0fa971ac9e834218957059819155291f_508) | | | [258](#i0fa971ac9e834218957059819155291f_508) | | |

| | | | [15. Retirement Benefits](#i0fa971ac9e834218957059819155291f_517) | | | [264](#i0fa971ac9e834218957059819155291f_517) | | |

| | | | [16. Derivative Financial Instruments](#i0fa971ac9e834218957059819155291f_523) | | | [276](#i0fa971ac9e834218957059819155291f_523) | | |

| | | | [17. Debt and Credit Agreements](#i0fa971ac9e834218957059819155291f_529) | | | [281](#i0fa971ac9e834218957059819155291f_529) | | |

| | | | [19. Commitments and Contingencies](#i0fa971ac9e834218957059819155291f_547) | | | [305](#i0fa971ac9e834218957059819155291f_547) | | |

| | | | [20. Shareholders' Equity](#i0fa971ac9e834218957059819155291f_562) | | | [316](#i0fa971ac9e834218957059819155291f_562) | | |

| | | | [21. Stock-Based Compensation Plans](#i0fa971ac9e834218957059819155291f_568) | | | [317](#i0fa971ac9e834218957059819155291f_568) | | |

| | | | [22. Changes in Accumulated Other Comprehensive Income](#i0fa971ac9e834218957059819155291f_574) | | | [320](#i0fa971ac9e834218957059819155291f_574) | | |

| | | | [23. Variable Interest Entities](#i0fa971ac9e834218957059819155291f_580) | | | [321](#i0fa971ac9e834218957059819155291f_580) | | |

| | | | [24. Supplemental Financial Information](#i0fa971ac9e834218957059819155291f_589) | | | [326](#i0fa971ac9e834218957059819155291f_589) | | |

| | | | [25. Related Party Transactions](#i0fa971ac9e834218957059819155291f_598) | | | [333](#i0fa971ac9e834218957059819155291f_598) | | |

| | | | [26. Separation](#i0fa971ac9e834218957059819155291f_6575) | | | [335](#i0fa971ac9e834218957059819155291f_6575) | | |

| [PART III](#i0fa971ac9e834218957059819155291f_655) | | | | | | | | |

See Note [removed: 7] [added: 8] — [removed: Early] [added: Jointly Owned Electric Utility] Plant [removed: Retirements] of the Combined Notes to the Consolidated Financial Statements for additional information.

See Note [removed: 23] [added: 16] — [removed: Variable Interest Entities] [added: Debt and Credit Agreements] of the Combined Notes to Consolidated Financial Statements for additional information.

The Utility Registrants’ high voltage electric transmission lines owned and in service at December 31, [removed: 2021] [added: 2022] were as follows:

| 500,000(a) | | | — | | | | | | 188 | | | | | | 216 | | | | | | 109 | | | | | | [removed: 16] [added: 15] | | | | | | — | | |

| 345,000 | | | [removed: 2,676] [added: 2,678] | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |

| 230,000 | | | — | | | | | | 550 | | | | | | [removed: 358] [added: 352] | | | | | | 770 | | | | | | 472 | | | | | | [removed: 274] [added: 272] | | |

| 138,000 | | | [removed: 2,246] [added: 2,257] | | | | | | 135 | | | | | | 55 | | | | | | 61 | | | | | | 586 | | | | | | 214 | | |

| 69,000 | | | — | | | | | | 177 | | | | | | — | | | | | | — | | | | | | 567 | | | | | | [removed: 667] [added: 662] | | |

The following table presents PECO’s, BGE’s, and DPL’s natural gas pipeline miles at December 31, [removed: 2021:][added: 2022:]

| Service piping | | | 6,479 | | | | | | [removed: 6,407] [added: 6,761] | | | | | | [removed: 1,473] [added: 1,486] | | |

(a) DPL has a 10% undivided interest in approximately 8 miles of natural gas transmission mains located in [removed: Delaware] [added: Delaware,] which are used by DPL for its natural gas operations and by 90% owner for distribution of natural gas to its electric generating facilities.

| Overhead | | | 35,387 | | | | | | 12,965 | | | | | | 9,155 | | | | | | 4,130 | | | | | | 6,007 | | | | | | 7,345 | | |

| Underground | | | 32,684 | | | | | | 9,590 | | | | | | 17,927 | | | | | | 7,207 | | | | | | 6,513 | | | | | | 3,007 | | |

| Distribution | | | 6,990 | | | | | | 7,527 | | | | | | 2,198 | | |

| Total | | | 13,478 | | | | | | 14,440 | | | | | | 3,692 | | |

Generation

The following table presents Generation’s interests in net electric generating capacity by station at December 31, 2021:

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Station(a) | | | | | | Location | | | | | | No. of Units | | | | | | Percent Owned(b) | | | | | | Primary Fuel Type | | | | | | Primary Dispatch Type(c) | | | | | | Net Generation Capacity (MW)(d) | | | | | |

| Midwest | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Braidwood | | | | | | Braidwood, IL | | | | | | 2 | | | | | | | | | | | | Uranium | | | | | | Base-load | | | | | | 2,386 | | | | | |

| Byron | | | | | | Byron, IL | | | | | | 2 | | | | | | | | | | | | Uranium | | | | | | Base-load | | | | | | 2,347 | | | (e) | | |

| LaSalle | | | | | | Seneca, IL | | | | | | 2 | | | | | | | | | | | | Uranium | | | | | | Base-load | | | | | | 2,320 | | | | | |

| Dresden | | | | | | Morris, IL | | | | | | 2 | | | | | | | | | | | | Uranium | | | | | | Base-load | | | | | | 1,845 | | | (e) | | |

| Quad Cities | | | | | | Cordova, IL | | | | | | 2 | | | | | | 75 | | | | | | Uranium | | | | | | Base-load | | | | | | 1,403 | | | (f) | | |

| Clinton | | | | | | Clinton, IL | | | | | | 1 | | | | | | | | | | | | Uranium | | | | | | Base-load | | | | | | 1,080 | | | | | |

| Michigan Wind 2 | | | | | | Sanilac Co., MI | | | | | | 50 | | | | | | 51 | | | (g) | | | Wind | | | | | | Intermittent | | | | | | 46 | | | (f) | | |

| Beebe | | | | | | Gratiot Co., MI | | | | | | 34 | | | | | | 51 | | | (g) | | | Wind | | | | | | Intermittent | | | | | | 42 | | | (f) | | |

| Michigan Wind 1 | | | | | | Huron Co., MI | | | | | | 46 | | | | | | 51 | | | (g) | | | Wind | | | | | | Intermittent | | | | | | 35 | | | (f) | | |

| Harvest 2 | | | | | | Huron Co., MI | | | | | | 33 | | | | | | 51 | | | (g) | | | Wind | | | | | | Intermittent | | | | | | 30 | | | (f) | | |

| Harvest | | | | | | Huron Co., MI | | | | | | 32 | | | | | | 51 | | | (g) | | | Wind | | | | | | Intermittent | | | | | | 27 | | | (f) | | |

| Beebe 1B | | | | | | Gratiot Co., MI | | | | | | 21 | | | | | | 51 | | | (g) | | | Wind | | | | | | Intermittent | | | | | | 26 | | | (f) | | |

| Blue Breezes | | | | | | Faribault Co., MN | | | | | | 2 | | | | | | | | | | | | Wind | | | | | | Intermittent | | | | | | 3 | | | | | |

| CP Windfarm | | | | | | Faribault Co., MN | | | | | | 2 | | | | | | 51 | | | (g) | | | Wind | | | | | | Intermittent | | | | | | 2 | | | (f) | | |

| Southeast Chicago | | | | | | Chicago, IL | | | | | | 8 | | | | | | | | | | | | Gas | | | | | | Peaking | | | | | | 296 | | | (h) | | |

| Clinton Battery Storage | | | | | | Blanchester, OH | | | | | | 1 | | | | | | | | | | | | Energy Storage | | | | | | Peaking | | | | | | 10 | | | | | |

| Total Midwest | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 11,898 | | | | | |

| Mid-Atlantic | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Limerick | | | | | | Sanatoga, PA | | | | | | 2 | | | | | | | | | | | | Uranium | | | | | | Base-load | | | | | | 2,317 | | | | | |

| Calvert Cliffs | | | | | | Lusby, MD | | | | | | 2 | | | | | | | | | | | | Uranium | | | | | | Base-load | | | | | | 1,789 | | | | | |

| Peach Bottom | | | | | | Delta, PA | | | | | | 2 | | | | | | 50 | | | | | | Uranium | | | | | | Base-load | | | | | | 1,324 | | | (f) | | |

| Salem | | | | | | Lower Alloways Creek Township, NJ | | | | | | 2 | | | | | | 42.59 | | | | | | Uranium | | | | | | Base-load | | | | | | 995 | | | (f) | | |

| Conowingo | | | | | | Darlington, MD | | | | | | 11 | | | | | | | | | | | | Hydroelectric | | | | | | Base-load | | | | | | 572 | | | | | |

| Criterion | | | | | | Oakland, MD | | | | | | 28 | | | | | | 51 | | | (g) | | | Wind | | | | | | Intermittent | | | | | | 36 | | | (f) | | |

| Fair Wind | | | | | | Garrett County, MD | | | | | | 12 | | | | | | | | | | | | Wind | | | | | | Intermittent | | | | | | 30 | | | | | |

| Fourmile Ridge | | | | | | Garrett County, MD | | | | | | 16 | | | | | | 51 | | | (g) | | | Wind | | | | | | Intermittent | | | | | | 20 | | | (f) | | |

| Solar Horizons | | | | | | Emmitsburg, MD | | | | | | 1 | | | | | | 51 | | | (g) | | | Solar | | | | | | Intermittent | | | | | | 16 | | | (f) | | |

| Solar New Jersey 3 | | | | | | Middle Township, NJ | | | | | | 4 | | | | | | 51 | | | (g) | | | Solar | | | | | | Intermittent | | | | | | 2 | | | (f) | | |

| Muddy Run | | | | | | Drumore, PA | | | | | | 8 | | | | | | | | | | | | Hydroelectric | | | | | | Intermediate | | | | | | 1,070 | | | | | |

| Eddystone 3, 4 | | | | | | Eddystone, PA | | | | | | 2 | | | | | | | | | | | | Oil/Gas | | | | | | Peaking | | | | | | 760 | | | | | |

| Perryman | | | | | | Aberdeen, MD | | | | | | 5 | | | | | | | | | | | | Oil/Gas | | | | | | Peaking | | | | | | 404 | | | | | |

| Croydon | | | | | | West Bristol, PA | | | | | | 8 | | | | | | | | | | | | Oil | | | | | | Peaking | | | | | | 391 | | | | | |

| Handsome Lake | | | | | | Kennerdell, PA | | | | | | 5 | | | | | | | | | | | | Gas | | | | | | Peaking | | | | | | 268 | | | | | |

| Richmond | | | | | | Philadelphia, PA | | | | | | 2 | | | | | | | | | | | | Oil | | | | | | Peaking | | | | | | 98 | | | | | |

(Dollars in [removed: millions] [added: millions,] except per share data, unless otherwise noted)

As of January 31, [removed: 2022,] [added: 2023,] there were [removed: 980,136,968] [added: 994,126,931] shares of common stock outstanding and approximately [removed: 85,423] [added: 80,780] record holders of common stock.

The performance graph below illustrates a five-year comparison of cumulative total returns based on an initial investment of $100 in Exelon common stock, [removed: as] compared with the S&P 500 Stock Index and the S&P Utility Index, for the period [removed: 2017] [added: 2018] through [removed: 2021.][added: 2022.]

- $100 invested on December 31, [removed: 2016] [added: 2017] in Exelon common stock, the S&P 500 Stock Index, and the S&P Utility Index; and

[removed: ][added: ]

| | | | [removed: 2016 | | |] 2017 | | | 2018 | | | 2019 | | | 2020 | | | 2021 | | | [added: 2022 | | |]

As of January 31, [removed: 2022,] [added: 2023,] there were [removed: 127,021,391] [added: 127,021,394] outstanding shares of common stock, $12.50 par value, of ComEd, of which 127,002,904 shares were indirectly held by Exelon.

[removed: At] [added: As of] January 31, [removed: 2022,] [added: 2023,] in addition to Exelon, there were [removed: 285] [added: 283] record holders of ComEd common stock.

As of January 31, [removed: 2022,] [added: 2023,] there were 170,478,507 outstanding shares of common stock, without par value, of PECO, all of which were indirectly held by Exelon.

As of January 31, [removed: 2022,] [added: 2023,] there were 1,000 outstanding shares of common stock, without par value, of BGE, all of which were indirectly held by Exelon.

As of January 31, [removed: 2022,] [added: 2023,] Exelon indirectly held the entire membership interest in PHI.

As of January 31, [removed: 2022,] [added: 2023,] there were 100 outstanding shares of common stock, $0.01 par value, of Pepco, all of which were indirectly held by Exelon.

As of January 31, [removed: 2022,] [added: 2023,] there were 1,000 outstanding shares of common stock, $2.25 par value, of DPL, all of which were indirectly held by Exelon.

As of January 31, [removed: 2022,] [added: 2023,] there were 8,546,017 outstanding shares of common stock, $3.00 par value, of ACE, all of which were indirectly held by Exelon.

Under applicable Federal law, ComEd, PECO, BGE, PHI, Pepco, DPL, and ACE can pay dividends only from retained, [removed: undistributed] [added: undistributed,] or current earnings.

A significant loss recorded [removed: at,] [added: at] ComEd, PECO, BGE, PHI, Pepco, DPL, or ACE may limit the dividends that these companies can distribute to Exelon.

ComEd has [removed: agreed] [added: agreed,] in connection with a financing arranged through ComEd Financing [removed: III] [added: III,] that ComEd will not declare dividends on any shares of its capital stock in the event that: (1) it exercises its right to extend the interest payment periods on the subordinated debt securities issued to ComEd Financing III; (2) it defaults on its guarantee of the payment of distributions on the preferred trust securities of ComEd Financing III; or (3) an event of default occurs under the Indenture under which the subordinated debt securities are issued.

PECO has [removed: agreed] [added: agreed,] in connection with financings arranged through PEC L.P. and PECO Trust [removed: IV] [added: IV,] that PECO will not declare dividends on any shares of its capital stock in the event that: (1) it exercises its right to extend the interest payment periods on the subordinated debentures which were issued to PEC L.P. or PECO Trust IV; (2) it defaults on its guarantee of the payment of distributions on the Series D Preferred Securities of PEC L.P. or the preferred trust securities of PECO Trust IV; or (3) an event of default occurs under the Indenture under which the subordinated debentures are issued.

Pepco is [removed: prohibited] [added: subject to certain dividend restrictions established by settlements approved by the MDPSC and DCPSC that prohibit Pepco] from paying a dividend on its common shares if (a) after the dividend payment, Pepco's equity ratio would be below 48% as [removed: equity levels are] calculated [removed: under the ratemaking precedents of] [added: pursuant to] the [removed: MDPSC] [added: MDPSC's] and [removed: DCPSC] [added: DCPSC's ratemaking precedents,] or (b) Pepco’s senior unsecured credit rating is rated by one of the three major credit rating agencies below investment grade.

DPL is [removed: prohibited] [added: subject to certain dividend restrictions established by settlements approved by the DEPSC and MDPSC that prohibit DPL] from paying a dividend on its common shares if (a) after the dividend payment, DPL's equity ratio would be below 48% as [removed: equity levels are] calculated [removed: under the ratemaking precedents of] [added: pursuant to] the [removed: DEPSC] [added: DEPSC's] and [removed: MDPSC] [added: MDPSC's ratemaking precedents,] or (b) DPL’s [added: corporate issuer or] senior unsecured credit [removed: rating] [added: rating, or its equivalent,] is rated by [removed: one] [added: any] of the three major credit rating agencies below [added: the generally accepted definition of] investment grade.

ACE is [removed: prohibited] [added: subject to certain dividend restrictions established by settlements approved by the NJBPU that prohibit ACE] from paying a dividend on its common shares if (a) after the dividend payment, ACE's [added: common] equity ratio would be below 48% as [removed: equity levels are] calculated [removed: under] [added: pursuant to] the [added: NJBPU's] ratemaking [removed: precedents of the NJBPU] [added: precedents,] or (b) ACE's senior [added: corporate issuer or senior] unsecured credit rating is rated by one of the three major credit rating agencies below investment grade.

ACE is also subject to a dividend restriction which requires ACE to [added: notify and] obtain the prior approval of the NJBPU before dividends can be paid if its equity as a percent of its total capitalization, excluding securitization debt, falls below 30%.

Exelon’s Board of Directors approved an updated dividend policy for [removed: 2022.][added: 2023.]

The [removed: 2022] [added: 2023] quarterly dividend will be [removed: $0.3375] [added: $0.36] per share.

The following table sets forth Exelon’s quarterly cash dividends per share paid during [removed: 2021] [added: 2022] and [removed: 2020:][added: 2021:]

| Exelon | | | $ | [removed: 0.3825] [added: 0.3375] | | | | | $ | [removed: 0.3825] [added: 0.3375] | | | | | $ | [removed: 0.3825] [added: 0.3375] | | | | | $ | [removed: 0.3825] [added: 0.3375] | | | | | $ | 0.3825 | | | | | $ | 0.3825 | | | | | $ | 0.3825 | | | | | $ | 0.3825 | |

| ComEd | | | [removed: 127] [added: 144] | | | | | | [removed: 127] [added: 145] | | | | | | [removed: 126] [added: 145] | | | | | | [removed: 127] [added: 144] | | | | | | [removed: 126] [added: 127] | | | | | | [removed: 124] [added: 127] | | | | | | [removed: 124] [added: 126] | | | | | | [removed: 125] [added: 127] | | |

| PECO | | | [removed: 85] [added: 100] | | | | | | [removed: 85] [added: 99] | | | | | | [removed: 84] [added: 100] | | | | | | [removed: 85] [added: 100] | | | | | | 85 | | | | | | 85 | | | | | | [removed: 85] [added: 84] | | | | | | 85 | | |

| BGE | | | [removed: 73] [added: 74] | | | | | | [removed: 73] [added: 75] | | | | | | [removed: 72] [added: 75] | | | | | | [removed: 74] [added: 76] | | | | | | [removed: 60] [added: 73] | | | | | | [removed: 62] [added: 73] | | | | | | [removed: 62] [added: 72] | | | | | | [removed: 62] [added: 74] | | |

| PHI | | | [removed: 98] [added: 125] | | | | | | [removed: 191] [added: 230] | | | | | | [removed: 333] [added: 293] | | | | | | [removed: 81] [added: 102] | | | | | | [removed: 102] [added: 98] | | | | | | [removed: 183] [added: 191] | | | | | | [removed: 134] [added: 333] | | | | | | [removed: 134] [added: 81] | | |

| DPL | | | [removed: 41] [added: 48] | | | | | | [removed: 43] [added: 39] | | | | | | [removed: 23] [added: 15] | | | | | | [removed: 40] [added: 41] | | | | | | [removed: 42] [added: 41] | | | | | | [removed: 33] [added: 43] | | | | | | [removed: 14] [added: 23] | | | | | | [removed: 52] [added: 40] | | |

| ACE | | | [removed: 8] [added: 17] | | | | | | [removed: 51] [added: 90] | | | | | | [removed: 215] [added: 19] | | | | | | [removed: 14] [added: 19] | | | | | | [removed: 3] [added: 8] | | | | | | [removed: 76] [added: 51] | | | | | | [removed: 12] [added: 215] | | | | | | [removed: 23] [added: 14] | | |

First Quarter [removed: 2022] [added: 2023] Dividend

On February [removed: 8, 2022,] [added: 14, 2023,] Exelon's Board of Directors declared a regular quarterly dividend of [removed: $0.3375] [added: $0.36] per share on Exelon’s common stock for the first quarter of [removed: 2022.][added: 2023.]

The dividend is payable on [removed: Monday,] [added: Friday,] March 10, [removed: 2022,] [added: 2023,] to shareholders of record of Exelon as of 5 p.m.

Eastern time on [removed: Friday,] [added: Monday,] February [removed: 25, 2022.][added: 27, 2023.]

Cumulative total returns account for the separation of Constellation, as spin-off dividend is assumed to be reinvested as received.

| Exelon Corporation | | | $100.00 | | | $118.33 | | | $123.39 | | | $118.59 | | | $167.70 | | | $181.67 | | |

| S&P 500 | | | $100.00 | | | $95.62 | | | $125.72 | | | $148.85 | | | $191.58 | | | $156.88 | | |

| S&P Utilities | | | $100.00 | | | $104.11 | | | $131.54 | | | $132.18 | | | $155.53 | | | $157.97 | | |

As of December 31, 2022, Exelon had retained earnings of $4,597 million, ComEd had retained earnings of $2,030 million, PECO had retained earnings of $1,861 million, BGE had retained earnings of $2,075 million, and PHI had undistributed losses of $352 million.

| | | | 2022 | | | | | | | | | | | | | | | | | | | | | | | | 2021 | | | | | | | | | | | | | | | | | | | | |

| | | | 2022 | | | | | | | | | | | | | | | | | | | | | | | | 2021 | | | | | | | | | | | | | | | | | | | | |

| Pepco | | | 63 | | | | | | 100 | | | | | | 258 | | | | | | 42 | | | | | | 47 | | | | | | 98 | | | | | | 95 | | | | | | 28 | | |

| Exelon Corporation | | | $100 | | | $115.05 | | | $136.13 | | | $141.96 | | | $136.44 | | | $192.94 | | |

| S&P 500 | | | $100 | | | $121.83 | | | $116.49 | | | $153.17 | | | $181.35 | | | $233.41 | | |

| S&P Utilities | | | $100 | | | $112.11 | | | $116.71 | | | $147.46 | | | $148.18 | | | $174.36 | | |

Pepco is subject to certain dividend restrictions established by settlements approved in Maryland and the District of Columbia.

DPL is subject to certain dividend restrictions established by settlements approved in Delaware and Maryland.

ACE is subject to certain dividend restrictions established by settlements approved in New Jersey.

At December 31, 2021, Exelon had retained earnings of $16,942 million, ComEd’s retained earnings of $1,691 million consisting of retained earnings appropriated for future dividends of $3,330 million, partially offset by $1,639 million of unappropriated accumulated deficits, PECO’s retained earnings of $1,684 million, BGE’s retained earnings of $1,995 million, and PHI's undistributed losses of $210 million.

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| | | | 2021 | | | | | | | | | | | | | | | | | | | | | | | | 2020 | | | | | | | | | | | | | | | | | | | | |

| Pepco | | | 47 | | | | | | 98 | | | | | | 95 | | | | | | 28 | | | | | | 58 | | | | | | 73 | | | | | | 73 | | | | | | 28 | | |

Not Applicable

Exelon’s management conducted an assessment of the effectiveness of Exelon’s internal control over financial reporting as of December 31, [removed: 2021.][added: 2022.]

In making this assessment, management used the criteria in [removed: *Internal] [added: Internal] Control—Integrated Framework [removed: (2013)*] [added: (2013)] issued by the Committee of Sponsoring Organizations of the Treadway Commission.

Based on this assessment, Exelon’s management concluded that, as of December 31, [removed: 2021,] [added: 2022,] Exelon’s internal control over financial reporting was effective.

The effectiveness of Exelon’s internal control over financial reporting as of December 31, [removed: 2021,] [added: 2022,] has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report which appears herein.

ComEd’s management conducted an assessment of the effectiveness of ComEd’s internal control over financial reporting as of December 31, [removed: 2021.][added: 2022.]

Based on this assessment, ComEd’s management concluded that, as of December 31, [removed: 2021,] [added: 2022,] ComEd’s internal control over financial reporting was effective.

PECO’s management conducted an assessment of the effectiveness of PECO’s internal control over financial reporting as of December 31, [removed: 2021.][added: 2022.]

Based on this assessment, PECO’s management concluded that, as of December 31, [removed: 2021,] [added: 2022,] PECO’s internal control over financial reporting was effective.

BGE’s management conducted an assessment of the effectiveness of BGE’s internal control over financial reporting as of December 31, [removed: 2021.][added: 2022.]

Based on this assessment, BGE’s management concluded that, as of December 31, [removed: 2021,] [added: 2022,] BGE’s internal control over financial reporting was effective.

PHI’s management conducted an assessment of the effectiveness of PHI’s internal control over financial reporting as of December 31, [removed: 2021.][added: 2022.]

Based on this assessment, PHI’s management concluded that, as of December 31, [removed: 2021,] [added: 2022,] PHI’s internal control over financial reporting was effective.

Pepco’s management conducted an assessment of the effectiveness of Pepco’s internal control over financial reporting as of December 31, [removed: 2021.][added: 2022.]

Based on this assessment, Pepco’s management concluded that, as of December 31, [removed: 2021,] [added: 2022,] Pepco’s internal control over financial reporting was effective.

DPL’s management conducted an assessment of the effectiveness of DPL’s internal control over financial reporting as of December 31, [removed: 2021.][added: 2022.]

Based on this assessment, DPL’s management concluded that, as of December 31, [removed: 2021,] [added: 2022,] DPL’s internal control over financial reporting was effective.

ACE’s management conducted an assessment of the effectiveness of ACE’s internal control over financial reporting as of December 31, [removed: 2021.][added: 2022.]

Based on this assessment, ACE’s management concluded that, as of December 31, [removed: 2021,] [added: 2022,] ACE’s internal control over financial reporting was effective.

We have audited the consolidated financial statements, including the related notes, [added: of Exelon Corporation and its subsidiaries (the “Company”)] as listed in the index appearing under Item 15(a)(1)(i), and the financial statement schedules listed in the index appearing under Item 15(a)(1)(ii), [removed: of Exelon Corporation and its subsidiaries (the “Company”)] (collectively referred to as the “consolidated financial statements”).

We also have audited the Company's internal control over financial reporting as of December 31, [removed: 2021,] [added: 2022,] based on criteria established in [removed: *Internal] [added: Internal] Control - Integrated [removed: Framework*] [added: Framework] (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, [removed: 2021] [added: 2022] and [removed: 2020,] [added: 2021,] and the results of its operations and its cash flows for each of the three years in the period ended December 31, [removed: 2021] [added: 2022] in conformity with accounting principles generally accepted in the United States of America.

Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, [removed: 2021,] [added: 2022,] based on criteria established in [removed: *Internal] [added: Internal] Control - Integrated [removed: Framework*] [added: Framework] (2013) issued by the COSO.

The critical audit [removed: matters] [added: matter] communicated below [removed: are matters] [added: is a matter] arising from the current period audit of the consolidated financial statements that [removed: were] [added: was] communicated or required to be communicated to the audit committee and that (i) [removed: relate] [added: relates] to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit [removed: matters] [added: matter] below, providing [added: a] separate [removed: opinions] [added: opinion] on the critical audit [removed: matters] [added: matter] or on the accounts or disclosures to which [removed: they relate.][added: it relates.]

[removed: As described in Notes 1, 8, and 12 to the consolidated financial statements, the Company evaluates] [added: Long-Lived Assets (All Registrants). The Registrants evaluate] the carrying value of long-lived assets [removed: or asset groups] for recoverability whenever events or changes in circumstances indicate that the carrying value of those assets may not be recoverable.

Indicators of impairment may include [removed: a deteriorating business climate, including, but not limited to, declines in energy prices, condition of the asset,] [added: specific regulatory disallowance, abandonment,] or plans to dispose of a long-lived asset significantly before the end of its useful life.

When the [added: estimated] undiscounted [added: future] cash [removed: flow analysis indicates a] [added: flows attributable to the] long-lived asset [removed: or asset group] may not be recoverable, the amount of the impairment loss is determined by measuring the excess of the carrying amount of the long-lived asset [removed: or asset group] over its fair value.

As of December 31, [removed: 2021,] [added: 2022,] there were [removed: $9.5] [added: $9.7] billion of regulatory assets and [removed: $10.0] [added: $9.5] billion of regulatory liabilities.

We have audited the consolidated financial statements, including the related notes, [added: of Commonwealth Edison Company and its subsidiaries (the “Company”)] as listed in the index appearing under Item 15(a)(2)(i), and the financial statement schedule listed in the index appearing under Item [removed: 15(a)(2)(ii), of Commonwealth Edison Company and its subsidiaries (the “Company”)] [added: 15(a)(2)(ii)] (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, [removed: 2021] [added: 2022] and [removed: 2020,] [added: 2021,] and the results of its operations and its cash flows for each of the three years in the period ended December 31, [removed: 2021] [added: 2022] in conformity with accounting principles generally accepted in the United States of America.

As part of our [removed: audits,] [added: audits] we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting.

As of December 31, [removed: 2021,] [added: 2022,] there were [removed: $2.2] [added: $3.4] billion of regulatory assets and [removed: $6.9] [added: $7.1] billion of regulatory liabilities.

To the Board of Directors and [removed: Shareholder] [added: Shareholders] of PECO Energy Company

We have audited the consolidated financial statements, including the related notes, [added: of PECO Energy Company and its subsidiaries (the “Company”)] as listed in the index appearing under Item 15(a)(3)(i), and the financial statement schedule listed in the index appearing under Item [removed: 15(a)(3)(ii), of PECO Energy Company and its subsidiaries (the “Company”)] [added: 15(a)(3)(ii)] (collectively referred to as the “consolidated financial statements”).

As of December 31, [removed: 2021,] [added: 2022,] there were [removed: $991] [added: $732] million of regulatory assets and [removed: $729] [added: $345] million of regulatory liabilities.

We have audited the financial statements, including the related notes, [added: of Baltimore Gas and Electric Company (the “Company”)] as listed in the index appearing under Item 15(a)(4)(i), and the financial statement schedule listed in the index appearing under Item [removed: 15(a)(4)(ii), of Baltimore Gas and Electric Company (the “Company”)] [added: 15(a)(4)(ii)] (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, [removed: 2021] [added: 2022] and [removed: 2020,] [added: 2021,] and the results of its operations and its cash flows for each of the three years in the period ended December 31, [removed: 2021] [added: 2022] in conformity with accounting principles generally accepted in the United States of America.

As of December 31, [removed: 2021,] [added: 2022,] there were [removed: $692] [added: $704] million of regulatory assets and [removed: $960] [added: $863] million of regulatory liabilities.

We have audited the consolidated financial statements, including the related notes, [added: of Pepco Holdings LLC and its subsidiaries (the “Company”)] as listed in the index appearing under Item 15(a)(5)(i), and the financial statement schedule listed in the index appearing under Item [removed: 15(a)(5)(ii), of Pepco Holdings LLC and its subsidiaries (the “Company”)] [added: 15(a)(5)(ii)] (collectively referred to as the “consolidated financial statements”).

As of December 31, [removed: 2021,] [added: 2022,] there were [removed: $2.2] [added: $2.1] billion of regulatory assets and [removed: $1.3] [added: $1.1] billion of regulatory liabilities.

In making this assessment, management used the criteria in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

February 14, 2023

In making this assessment, management used the criteria in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

February 14, 2023

In making this assessment, management used the criteria in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

February 14, 2023

February 14, 2023

In making this assessment, management used the criteria in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

February 14, 2023

In making this assessment, management used the criteria in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

February 14, 2023

In making this assessment, management used the criteria in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

February 14, 2023

February 14, 2023

February 14, 2023

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2022 in conformity with accounting principles generally accepted in the United States of America.

As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting.

February 14, 2023

As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting.

February 14, 2023

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2022 in conformity with accounting principles generally accepted in the United States of America.

As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting.

February 14, 2023

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2022 in conformity with accounting principles generally accepted in the United States of America.

As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting.

February 14, 2023

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2022 in conformity with accounting principles generally accepted in the United States of America.

As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting.

February 14, 2023

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2022 in conformity with accounting principles generally accepted in the United States of America.

As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting.

February 14, 2023

| Electric operating revenues | | | $ | 16,899 | | | | | $ | 16,245 | | | | | $ | 15,236 | |

| Natural gas operating revenues | | | 2,018 | | | | | | 1,522 | | | | | | 1,421 | | |

| Total operating revenues | | | 19,078 | | | | | | 17,938 | | | | | | 16,663 | | |

| Purchased power | | | 5,380 | | | | | | 4,703 | | | | | | 4,086 | | |

| Purchased fuel | | | 834 | | | | | | 504 | | | | | | 426 | | |

| Purchased power and fuel from affiliates | | | 159 | | | | | | 1,178 | | | | | | 1,209 | | |

| Taxes other than income taxes | | | 1,390 | | | | | | 1,291 | | | | | | 1,232 | | |

| Total operating expenses | | | 15,761 | | | | | | 15,256 | | | | | | 14,485 | | |

February 25, 2022

*Annual Nuclear Decommissioning Asset Retirement Obligations (ARO) Assessment*

As described in Notes 1 and 10 to the consolidated financial statements, the Company has a legal obligation to decommission its nuclear generation stations following permanent cessation of operations.

To estimate its decommissioning obligations related to its nuclear generating stations for financial accounting and reporting purposes, management uses a probability-weighted, discounted cash flow model which, on a unit-by-unit basis, considers multiple outcome scenarios that include significant estimates and assumptions, and are based on decommissioning cost studies, cost escalation rates, probabilistic cash flow models, and discount rates.

Management updates its ARO annually, unless circumstances warrant more frequent updates, based on its review of updated cost studies and its annual evaluation of cost escalation factors and probabilities assigned to various scenarios.

As of December 31, 2021, the nuclear decommissioning ARO was $12.7 billion.

The principal considerations for our determination that performing procedures relating to the Company’s annual nuclear decommissioning ARO assessment is a critical audit matter are the significant judgment by management when estimating its decommissioning obligations; this in turn led to a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating the reasonableness of management’s discounted cash flow model and significant assumptions related to decommissioning cost studies.

In addition, the audit effort involved the use of professionals with specialized skill and knowledge.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.

These procedures included testing the effectiveness of controls relating to management’s development of the inputs, assumptions, and model used in management’s ARO assessment.

These procedures also included, among others, testing management’s process for estimating the decommissioning obligations by evaluating the appropriateness of the discounted cash flow model, testing the completeness and accuracy of data used by management, and evaluating the reasonableness of management’s significant assumptions related to decommissioning cost studies.

Professionals with specialized skill and knowledge were used to assist in evaluating the results of decommissioning cost studies.

*Impairment Assessment of Long-Lived Generation Assets*

Management determines if long-lived assets or asset groups are potentially impaired by comparing the undiscounted expected future cash flows to the carrying value when indicators of impairment exist.

The fair value analysis is primarily based on the income approach using significant unobservable inputs including revenue and generation forecasts, projected capital and maintenance expenditures, and discount rates.

As of December 31, 2021, the total carrying value of long-lived generation assets subject to this assessment was $19.6 billion.

The principal considerations for our determination that performing procedures relating to the Company’s impairment assessment of long-lived generation assets is a critical audit matter are the significant judgment by management in assessing the recoverability and estimating the fair value of these long-lived generation assets or asset groups; this in turn led to a high degree of auditor judgment, subjectivity and effort in performing procedures and evaluating the reasonableness of management’s significant assumptions related to revenue and generation forecasts.

These procedures included testing the effectiveness of controls relating to management’s development of the inputs, assumptions, and model used to assess the recoverability and estimate the fair value of the Company’s long-lived generation assets or asset groups.

These procedures also included, among others, testing management’s process for developing the expected future cash flows for the long-lived generation assets or asset groups by evaluating the appropriateness of the future cash flow model, testing the completeness and accuracy of the data used by management, and evaluating the reasonableness of management’s significant assumptions related to revenue and generation forecasts.

Evaluating the reasonableness of the revenue and generation forecasts involved considering whether the forecasts were consistent with future commodity prices and external market data.

Professionals with specialized skill and knowledge were used to assist in evaluating the reasonableness of the revenue forecasts.

| Competitive businesses revenues | | | $ | 18,467 | | | | | $ | 16,400 | | | | | $ | 17,754 | |

| Rate-regulated utility revenues | | | 17,709 | | | | | | 16,633 | | | | | | 16,839 | | |

| Total operating revenues | | | 36,347 | | | | | | 33,039 | | | | | | 34,438 | | |

| Rate-regulated utility purchased power and fuel | | | 5,207 | | | | | | 4,512 | | | | | | 4,648 | | |

| Operating and maintenance | | | 8,659 | | | | | | 9,408 | | | | | | 8,615 | | |

| Gain on deconsolidation of business | | | — | | | | | | — | | | | | | 1 | | |

| Operating income | | | 2,723 | | | | | | 2,823 | | | | | | 4,374 | | |